SIGAR Report to Congress

SIGAR SPECIAL INSPECTOR GENERAL SIGAR Special Inspector General for APR 30 FOR AFGHANISTAN RECONSTRUCTION Afghanistan Reconstruction 2017 2530 Crystal Drive

| SIGAR Arlington, VA 22202 QUARTERLY REPORT

www.sigar.mil

QUARTERLY REPORT TO THE UNITED STATES CONGRESS TO THE UNITED STATES CONGRESS

FRAUD, WASTE, OR ABUSE MAY BE REPORTED TO SIGAR’S HOTLINE

By phone: Afghanistan Cell: 0700107300 DSN: 318-237-3912 ext. 7303 All voicemail is in Dari, Pashto, and English.

By phone: United States Toll-free: 866-329-8893 DSN: 312-664-0378

All voicemail is in English and answered during business hours. | APRIL 30, 2017 By fax: 703-601-4065 By e-mail: [email protected] By Web submission: www.sigar.mil/investigations/hotline/report-fraud.aspx

2 SIGAR Report Fraud, Waste or Abuse

Apr2017_Cover_Final.indd 1 4/13/2017 12:38:12 PM The National Defense Authorization Act for FY 2008 (Pub. L. No. 110-181) established the Special Inspector General for Afghanistan Reconstruction (SIGAR).

SIGAR’s oversight mission, as defined by the legislation, is to provide for the independent and objective • conduct and supervision of audits and investigations relating to the programs and operations funded with amounts appropriated or otherwise made available for the reconstruction of Afghanistan. • leadership and coordination of, and recommendations on, policies designed to promote economy, efficiency, and effectiveness in the administration of the programs and operations, and to prevent and detect waste, fraud, and abuse in such programs and operations. • means of keeping the Secretary of State and the Secretary of Defense fully and currently informed about problems and deficiencies relating to the administration of such programs and operation and the necessity for and progress on corrective action. Afghanistan reconstruction includes any major contract, grant, agreement, or other funding mechanism entered into by any department or agency of the U.S. government that involves the use of amounts appropriated or otherwise made available for the reconstruction of Afghanistan.

An Afghan girl peeks at visitors to her father’s shop Uruzgan Province, Afghanistan. (Combined Joint Special Source: Pub. L. No. 110-181, “National Defense Authorization Act for FY 2008,” 1/28/2008. Operations Task Force photo by Staff Sgt. Kaily Brown) (For a list of the congressionally mandated contents of this report, see Section 3.)

Quarterly Report Staff

Michael Bindell, Economic and Social Development Subject Matter Expert Emmett Schneider, Senior Data Analyst/Senior Auditor Clark Irwin, Senior Writer/Editor Deborah Scroggins, Director of Research and Analysis Directorate/Editor Vong Lim, Visual Information Specialist Alfred Stovall III, Student Trainee Jim Misencik, Project Coordinator Solange Toura Gaba, Counternarcotics Subject Matter Expert Cameron Moubray, Student Trainee Daniel Weggeland, Governance Subject Matter Expert Cover photo: Olivia Paek, Senior Visual Information Specialist Joseph Windrem, Deputy Director of Research and Analysis Directorate/Editor A U.S. Marine Corps helicopter crew chief maintains visual observation while flying over Helmand Province, Afghanistan. (USMC photo by Lance Cpl. Robert R. Carrasco) Heather Robinson, Security Subject Matter Expert

Apr2017_Cover_Final.indd 2 4/13/2017 12:38:13 PM KUNDUZ BADAKHSHAN JOWZJAN BALKH TAKHAR

SAMANGAN FARYAB BAGHLAN SAR-E PUL PANJSHIR BADGHIS NURISTAN PARWAN KAPISA KUNAR BAMYAN LAGHMAN HERAT KABUL WARDAK NANGARHAR GHOR LOGAR DAYKUNDI PAKTIYA GHAZNI KHOWST

URUZGAN FARAH PAKTIKA ZABUL

NIMROZ HELMAND KANDAHAR Provinces where SIGAR has conducted or commissioned audit, inspection, special project, and/or investigation work as of March 31, 2017 SPECIAL INSPECTOR GENERAL FOR AFGHANISTAN RECONSTRUCTION

I am pleased to submit to Congress, and the Secretaries of State and Defense, SIGAR’s 35th quarterly report on the status of the U.S. reconstruction effort in Afghanistan. This quarter, the new Administration has been engaged in a review of U.S. policy in Afghanistan. National Security Advisor Lieutenant General H.R. McMaster visited Kabul, meeting with senior Afghan and Coalition officials to gather first-hand impressions for the review. To support this review, this quarterly report includes an essay describing how Afghanistan’s reconstruction might be reexamined by the Administration. In particular, SIGAR proposes that federal agencies working in Afghanistan:

1. Identify stronger and weaker programs to facilitate more informed decisions on priorities and possible adjustments. 2. Prepare for triage by indicating what programs could be reduced, postponed, or cancelled if budget constraints required. 3. Impose enhanced management practices by examining programs and confirming that they have clearly defined objectives, measurable benchmarks, and sustainable end states. 4. Examine programs to check safeguards against losing funds to corruption or inadvertently providing support to the Taliban or terrorist networks. 5. Establish a U.S. counternarcotics strategy, now years overdue, to reduce the illicit commerce that provides the Taliban with the bulk of their revenue. 6. Determine if some capabilities eliminated during the previous U.S. efforts to “right-size” reconstruction need to be reinstated, including those dealing with contract vetting and threat financing.

In 2013, SIGAR asked the Departments of Defense and State, and the U.S. Agency for International Development, to identify 10 of their more successful and 10 of their less successful programs. The agencies deflected the request, but SIGAR continues to believe comprehensive and comparative evaluations are important tools. Four years later, the state of affairs in Afghanistan and in the federal budget process makes the need for comparison and options for triage more vital than ever. Afghanistan remains in the grip of a deadly war. Casualties suffered by the Afghan National Defense and Security Forces (ANDSF) in the fight against the Taliban and other insurgents continue to be shockingly high: 807 were killed in the first six weeks of this year. Likewise, civilian casualties in 2016 were the highest since the United Nations Assistance Mission in Afghanistan began reporting them in 2009. Among those killed in Kabul were more than 50 at Afghanistan’s largest military hospital on March 8, and two investigators from the Major Crimes Task Force on April 10. The first U.S. combat death of 2017 in Afghanistan occurred on April 8. The Army Special Forces soldier was killed while conducting counterterrorism operations against the Islamic State- Khorasan Province. Despite the security situation, SIGAR manages to continue meeting Afghan and Coalition officials and inspecting programs and projects around the country. For example, among many

2530 CRYSTAL DRIVE ARLINGTON, VIRGINIA 22202 other meetings on my most recent trip this quarter, I met with both President Ashraf Ghani and Chief Executive Abdullah Abdullah, as well as the ministers of finance, interior, defense, commerce and industries, and public health, and the ambassadors of the United Kingdom, Canada, Germany, and Denmark. I also traveled to the German-led Train Advise Assist Command (TAAC) in Mazar-e Sharif to witness the biometric registration of Afghan soldiers as part of an expanded effort by the Combined Security Transition Command-Afghanistan (CSTC-A) and the Ministry of Defense to ensure that the Afghan National Army’s personnel rolls are both accurate and credible. This quarter, SIGAR issued 16 audits, inspections, special projects, and other products. SIGAR work to date has identified approximately $2.1 billion in savings for the U.S. taxpayer. SIGAR published two performance audit reports. These audits examined DOD’s management and oversight of uniforms and equipment acquired for the ANDSF, and the impact and sustainability of USAID’s Land Reform in Afghanistan program. SIGAR completed five financial audits of U.S.-funded contracts, grants, and cooperative agreements to rebuild Afghanistan. These financial audits identified more than $7.3 million in questioned costs as a result of internal-control deficiencies and noncompliance issues. To date, SIGAR’s financial audits have identified more than $387 million in questioned costs. SIGAR also published two inspection reports. These reports examined the structurally damaged buildings SIGAR previously identified at Baghlan Prison and construction of the Balkh University women’s dormitories. SIGAR’s Office of Special Projects issued seven products examining a range of issues including locations and operating conditions at 30 USAID-supported public health facilities in Ghazni Province; the general usability of and potential structural, operational, and maintenance issues for 26 schools in Balkh Province; and six Bureau of International Narcotics and Law Enforcement Affairs-funded Good Performers Initiative infrastructure projects in Ghazni Province. SIGAR investigations resulted in three criminal information charges, two convictions, one sentencing, $150,000 in restitutions, and a civil settlement of $40 million. Additionally, SIGAR initiated 15 cases and closed 14, bringing the total number of ongoing investigations to 262. This quarter, SIGAR’s suspension and debarment program referred 12 individuals and 16 companies for debarment based on evidence developed as part of investigations conducted by SIGAR in Afghanistan and the United States. These referrals bring the total number of individuals and companies referred by SIGAR since 2008 to 837, encompassing 465 individuals and 372 companies to date. Many other projects are under way, including seeking clarity on the systems used to assess the readiness and capabilities of ANDSF tactical formations, and the adequacy of U.S. agencies’ access to Afghan data systems. These are important issues for judging the effectiveness of U.S. financial and technical assistance in promoting Afghan security and ministry capacity. Oversight remains a mission-critical function in Afghanistan. My SIGAR colleagues and I intend to keep working with Congress and the Administration to support our mission in Afghanistan by identifying and preventing the waste, fraud, and abuse of U.S. taxpayer funds in that country.

Sincerely,

John F. Sopko

2530 CRYSTAL DRIVE ARLINGTON, VIRGINIA 22202 EXECUTIVE SUMMARY

This report summarizes SIGAR’s oversight work and updates developments in four major sectors of Afghanistan’s reconstruction effort from January 1, 2017, to March 31, 2017.* It also includes an essay on reprioritizing Afghanistan reconstruction as the new Administration reviews its Afghan policy. During this reporting period, SIGAR issued 16 audits, inspections, special projects, and other products assessing U.S. efforts to build the Afghan security forces, improve governance, facilitate economic and social development, and combat the sale and production of narcotics. During the reporting period, SIGAR criminal investigations resulted in three criminal information charges, two convictions, one sentencing, $150,000 in restitutions, and a civil settlement of $40 million. SIGAR initiated 15 new investigations and closed 14, bringing the total number of ongoing investigations to 262. Additionally, SIGAR’s suspension and debarment program referred 12 individuals and 16 companies for debarment based on evidence developed as part of investigations conducted by SIGAR in Afghanistan and the United States.

SIGAR OVERVIEW

AUDITS This quarter, SIGAR issued two performance for the Afghan National Defense and audits, five financial audits, and two inspec- Security Forces (ANDSF) is limited tion reports. by poor data, reliance on questionable assumptions, and a lack of clear roles and The performance audits found: responsibilities. • USAID spent a total of $96.7 million from 2004 through 2014 to reform the The financial audits identified $7,301,539 existing system of land administration. in questioned costs as a result of internal- SIGAR found that USAID and Tetra Tech control deficiencies and noncompliance ARD did not fully measure the Land issues. Although one program was found to Reform in Afghanistan (LARA) program’s be in full compliance in all material respects, performance. Without such information, deficiencies and noncompliance issues the agency cannot demonstrate the identified in other programs included inad- full extent to which LARA achieved its equate documentation to support selection goals and objectives, or the impact the and hiring of consultants, a failure to per- $41.2 million program had on improving form checks to see if vendors were eligible land administration in Afghanistan. to participate in U.S. government-funded • The ability of DOD’s Combined Security activities, and inadequate documentation to Transition Command-Afghanistan support the reasonableness of costs incurred (CSTC-A) to develop and validate by subcontractors. clothing and equipment requirements

* SIGAR may also report on products and events occurring after March 31, 2017, up to the publication date.

iv SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION EXECUTIVE SUMMARY

The inspection reports found: Bureau of International Narcotics and Law • On September 28, 2010, the Department Enforcement Affairs funded through the of State’s (State) Bureau of International Good Performers Initiative Narcotics and Law Enforcement Affairs • ongoing and planned USAID, State, and (INL) awarded an $8.8 million contract DOD-funded infrastructure projects to Omran Holding Group, an Afghan firm, to build a 495-inmate prison in Baghlan Province. After an original inspection in INVESTIGATIONS May 2014, SIGAR initiated a follow-up During the reporting period, SIGAR criminal inspection in August 2015 and conducted investigations resulted in three criminal- a site visit in November 2015. During its information charges, two convictions, one November 2015 site visit, SIGAR identified sentencing, $150,000 in restitutions, and a 10 construction deficiencies that INL did civil settlement of $40 million. Additionally, not identify before it transferred the prison SIGAR initiated 15 new cases and closed 14, to the Afghan government. In June 2016 bringing the total number of ongoing inves- and again in December 2016, State officials tigations to 262. SIGAR’s suspension and informed SIGAR that no work has been debarment program also referred 12 individu- done at the prison since the November als and 16 companies for debarment based on 2015 site visit. evidence developed as part of investigations • State contracted an Afghan firm to conducted by SIGAR in Afghanistan and the construct the Balkh University women’s United States. dormitories in 2013. SIGAR found that the dormitories had not been completed Investigations highlights include: by their initial March 28, 2016, scheduled • a $40 million civil settlement in which completion date, and the project had MAERSK Limited Lines agreed to experienced delays throughout the pay for false claims submitted to the construction performance period. In U.S. government January 2017, the Kabul’s Public Affairs • a U.S. contractor pleaded guilty to failing Section of the U.S. Embassy informed to file tax returns SIGAR that the new scheduled completion • a U.S. contractor was charged with making date is June 2017. false statements • charges were filed against two former U.S. military members for theft of SPECIAL PROJECTS government property This quarter, SIGAR’s Office of Special • SIGAR’s investigative operations received Projects wrote seven reviews, review letters, a compliant rating following peer review and inquiry letters, examining a range of by the Council of Inspectors General on issues including: Integrity and Efficiency • observations on 30 USAID-supported health facilities in Ghazni Province • the condition of 26 schools in Balkh Province • 13 completed infrastructure projects in Ghazni and Khowst Provinces that the

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 v TABLE OF CONTENTS

SECTION 1 1 REPRIORITIZING AFGHANISTAN RECONSTRUCTION 4 Security and Other Challenges 6 Running Good Projects is a Tough Business 8 Diagnosing Failings is Difficult but Vital 10 Comparisons Must Follow Evaluations 11 What Should the White House and Congress Require?

SECTION 2 15 SIGAR OVERSIGHT ACTIVITIES 18 Quarterly Highlight: SIGAR Continues Oversight Work Despite Security Concerns 20 Audits 35 Inspections 42 Special Projects 45 Quarterly Highlight: Director of Special Projects Meets with Afghan Minister of Public Health to Set Up Information-Sharing Arrangements 48 Lessons Learned 49 Investigations 54 Other SIGAR Oversight Activities 57 SIGAR Budget 57 SIGAR Staff

SECTION 3 59 RECONSTRUCTION UPDATE 64 Status of Funds 80 Security 92 Quarterly Highlight: Helmand’s Embattled 215th Corps 122 Governance 154 Economic and Social Development 188 Counternarcotics TABLE OF CONTENTS

SECTION 4 201 OTHER AGENCY OVERSIGHT 204 Completed Oversight Activities 208 Ongoing Oversight Activities

APPENDICES AND ENDNOTES 218 Appendix A: Cross-Reference of Report to Statutory Requirements 222 Appendix B: U.S. Funds for Afghanistan Reconstruction 224 Appendix C: SIGAR Written Products 228 Appendix D: SIGAR Investigations and Hotline 236 Appendix E: Abbreviations and Acronyms 244 Endnotes “With a new Administration and a new Congress, it is a good idea and opportune time to reevaluate our efforts in Afghanistan and find out what’s working, and what’s not. … One smart first step would be to do what SIGAR recommended years ago, which is for each of the three major agencies in the reconstruction effort—State, USAID, and DOD—to ‘rack and stack’ their top and worst performing projects so they know where to invest further and where to cut their losses.”

—Special Inspector General John F. Sopko

Source: SIGAR, “The United States Mission in Afghanistan: A View from SIGAR John Sopko,” Sanford School of Public Policy, Duke University, 3/23/2017. REPRIORITIZING AFGHANISTAN 1RECONSTRUCTION

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CONTENTSREPRIORITIZING AFGHANISTAN CONTENTS

Security and Other Challenges 4 Running Good Projects is a Tough Business 6 Diagnosing Failings is Difficult but Vital 8 Comparisons Must Follow Evaluations 10 What Should the White House and Congress Require? 11

Photo on previous page An Afghan boy washes his feet at a bazaar in Logar Province, Afghanistan. (Joint Combat Camera Afghanistan photo by Sgt. Sean Casey)

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REPRIORITIZING AFGHANISTAN CONTENTS REPRIORITIZING AFGHANISTAN RECONSTRUCTION

America’s longest war is now in its sixteenth year, driven by the long-stand- Security and Other Challenges 4 ing goal of ensuring that Afghanistan never again serves as a platform for terrorist attacks on the United States. Running Good Projects is a Tough Business 6 The fighting continues, as does a reconstruction effort that has so far absorbed more than $117 billion in congressional appropriations. Both Diagnosing Failings is Difficult but Vital 8 the security and civil aspects of reconstruction—ranging from developing Afghan security forces and advising ministry staff, to building clinics and Comparisons Must Follow Evaluations 10 electrifying towns—have yielded mixed results. The United States and other international donors have helped What Should the White House Afghanistan make some progress. Afghan military and police forces have and Congress Require? 11 grown, taken lead responsibility for the country’s security, and show Farmers learn how to produce livestock increased effectiveness. Public health has improved, as reflected in lower feed from scrap vegetation as part of a infant mortality and increased life spans. School construction and stu- USAID-supported Ministry of Agriculture dent enrollments have expanded. Women’s status is slowly improving. program. (USAID photo) President Ashraf Ghani and Chief Executive Abdullah Abdullah both have personal involvement in attacking corruption, and better cooperation with U.S. investigators such as SIGAR in seeking indictments. These are no small achievements. Yet serious problems persist. A dangerous and stubborn insurgency controls or exerts influence over areas holding about a third of the Afghan population. Heavy casualties and capability gaps limit the effectiveness of Afghan soldiers and police. Opium production stands near record levels. Illiteracy and poverty remain widespread. Corruption reaches into every aspect of national life. The rule of law has limited reach. Multiple obstacles deter investors and complicate business operations. The ranks of the job- less grow as the economy stagnates. Efforts to combat these problems will also persist. At international conferences last year, the United States and other international donors committed to four more years of continued assistance to Afghanistan, and to delivering an increasing share of that aid on-budget—that is, under control of Afghan ministries and consequently with less visibility and influence for donors. All of these considerations raise questions about the objectives, assumptions, funding, execution, and oversight of the reconstruction effort.

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The new Administration is reportedly in the early stages of reviewing Afghanistan policy that could lead to revised approaches and priorities for reconstruction. SIGAR believes those reviews are essential, not least because demands on the U.S. military are growing and cuts in foreign-assistance budgets have been proposed. A frank review would likely lead to reprioritizing reconstruction in Afghanistan. As part of that process, as explained further in this essay, SIGAR believes the White House and Congress should consider requiring the principal federal agencies involved in reconstruction to: • Identify stronger and weaker programs to facilitate more informed decisions on priorities and possible adjustments. • Prepare for triage by indicating what programs could be reduced, postponed, or cancelled if budget constraints required. • Enhance management practices by examining programs and confirming that they have clearly defined objectives, measurable benchmarks, and sustainable end states. • Examine programs to check safeguards against losing funds to corruption or inadvertently providing support to the Taliban or to terrorist networks. • Establish a U.S. counternarcotics strategy, now years overdue, to reduce the illicit commerce that provides the Taliban with the bulk of their revenue. • Determine if some capabilities eliminated during the previous U.S. “right-sizing” initiatives need to be reinstated, such as those dealing with contract vetting and counter-terror threat financing.

SECURITY AND OTHER CHALLENGES The time is ripe for revisiting reconstruction. Afghanistan presents a varied landscape of progress that must be preserved, opportunities that must be expanded, and challenges that must be confronted. Security is the most obvious and urgent challenge. In February 2017, the chairman of the U.S. Senate Armed Services Committee asked General John W. Nicholson Jr., commander of NATO’s Resolute Support mission and of U.S. Forces-Afghanistan, whether the United States and its partners were winning or losing the 15-year war. “I believe we’re in a stalemate,” the general replied. He noted that Afghan security forces—largely trained, sustained, and paid by the United States—have been fighting hard and taking heavy casualties in the struggle against the Taliban insurgency and terrorist groups, have developed high-quality special forces units, and have prevented insurgents from taking and holding population centers. He also observed, however, that the drain of casualties is keeping force strength under authorized levels, and

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Soldiers of the Afghan 215th Corps train to perform forcible entry of an enemy-held building. (DOD photo by Cpl. Cody Haas, USMC)

that “of the 98 U.S.-designated terrorist groups globally, 20 operate in the Afghanistan-Pakistan region along with three violent extremist organizations. This is the highest concentration of terrorist groups anywhere in the world.”1 (The State Department has not designated the Taliban as a Foreign Terrorist Organization; the Obama Administration characterized them as an “armed insurgency.”2) The general’s view of the military situation weighs heavily on any consideration of the overall condition of the reconstruction effort in Afghanistan. More than $71 billion of U.S. appropriations for Afghanistan reconstruction since 2002—about 61% of the total—have gone toward training, clothing, housing, equipping, moving, and sustaining the 300,000-plus members of the Afghan National Defense and Security Forces, the ANDSF. The growing numbers and fighting capability of the ANDSF have permitted the United States to reduce its own military presence in Afghanistan by 90% over the past five years, to fewer than 9,000 personnel. The ANDSF faces many problems: unsustainable casualties, temporary losses of provincial and district centers, weakness in logistics and other functions, illiteracy in the ranks, often corrupt or ineffective leadership, and over-reliance on highly trained special forces for routine missions. In addition, about 35% of the force does not reenlist each year, so even full recruitment to cover attrition might dilute its quality.3 One recent indicator of the severity of difficulties confronting U.S. efforts to stand up and sustain an effective ANDSF were apparent in a March 28, 2017, announcement by the Afghan Ministry of Defense that the ministry had sacked 1,394 of its officials for corruption in the past year.4 These challenges are corrosive. If the military and police cannot provide honest and effective protection against insurgents, the result is to undercut

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nonmilitary initiatives in health care, education, rule of law, commerce, governance, and counternarcotics. Fighting insurgents and mentoring, and supporting Afghan security forces since 2002 has cost more than 2,400 American military members their lives, and has left more than 20,000 wounded. Additional thousands of Coalition personnel and contractors have also died during the conflict. Afghan losses have been the greatest of all: more than twice as many ANDSF members were killed in the single year of 2016 than U.S. forces in Afghanistan have lost since 2001.5

RUNNING GOOD PROJECTS IS A TOUGH BUSINESS Disappointments and occasional outright failures in security and other aspects of reconstruction should come as no surprise. Program and project management is difficult even for wealthy and technologically advanced countries, whether in government, business, or nonprofit settings, even in peacetime. In its worldwide operations, DOD, for example, “loses billions of dollars annually on canceled or failed acquisition programs,” according to a journal published by the military’s Defense Acquisition University. Projects studied ranged from helicopters and Navy cruisers to sensors and airborne lasers. All exhibited one or more of 11 main factors in project failure, such as issues with planning, budgets, scope, management, risk mitigation, and contracting.6 Project difficulties also occur in other developed countries. The National Audit Office—the British equivalent of the U.S. Government Accountability Office (GAO)—has reported that “two-thirds of public sector projects are completed late, over budget, or do not deliver the outcomes expected,” adding “the track record of project delivery in the private sector is equally mixed.”7 Frank, off-the-record conversations between IG Sopko and many donor-nation ambassadors and development officials confirm that almost all Women entrepreneurs meet suppliers of face similar project difficulties. agricultural products from Kabul, Kandahar, In Afghanistan, all the risk factors that plague other nations’ project and Herat. (USAID photo) and program management—including needs assessment, planning, design, implementation, monitoring, and evaluation—are magnified and have been evident for decades. SIGAR’s January 2017 High-Risk List cites some of the major challenges to operating programs in Afghanistan today:8 • limited institutional and human-capital capacity in Afghan institutions • operational demands and constraints imposed by an active insurgency • widespread corruption in Afghan society and government entities • Afghan reluctance or inability to impose accountability, especially on wealthy or well-connected persons in government and society

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• poor record keeping and data retention by U.S. agencies and Afghan entities • frequent personnel turnover and loss of U.S. agencies’ in-country institutional memory • U.S. oversight personnel’s noncompliance with existing rules and regulations • lack of adequate, coordinated, context-sensitive planning to guide program conduct • failure to give due weight to sustainability in considering projects for Afghan control

A major study by a USAID consultant in 1988 examined U.S. projects in Afghanistan between 1950 and 1979, when U.S. activity there was interrupted by the Soviet invasion. The report found U.S. projects “over- ambitious, both as to scale and timing,” and often “larger than could be effectively administered by either the US or Afghan governments.”9 Difficulties did not disappear once the United States resumed Afghan operations after the Soviet withdrawal and the overthrow of the Taliban regime. Before SIGAR was created, USAID’s Office of Inspector General audited a USAID road-rehabilitation program that was part of an agency effort to rebuild Afghan agricultural markets. That 2006 audit found that the contractor had not completed all its tasks, and that USAID/Afghanistan “did not properly administer its contract” or apply the Federal Acquisition Regulation as required.10 A decade later, and despite nearly $3 billion of U.S. aid for Afghan roads, a 2016 SIGAR audit revealed that problems remain. “Weak capacity, corruption, funding issues, and insecurity limit the [Ministry of Public Works’] ability to maintain Afghanistan’s road infrastructure,” the auditors observed, noting that the ministry receives less than 25% of the $100 million deemed necessary every year for adequate maintenance.11 SIGAR has called attention to many such problematic programs and projects. For example, USAID has provided major support to schools in Afghanistan, some $868 million as of September 2016.12 On March 31, 2017, SIGAR reported observations on visits to 26 schools in Afghanistan’s com- paratively peaceful and prosperous Balkh Province. SIGAR Office of Special Projects staff found only 30% of the 2,461 students reportedly enrolled were observed at the school at the time of their visit. Likewise, a minority of teachers whose salaries the United States supports were observed to be on-site at the schools. Such findings suggest that matters might be worse in more remote and contested areas, and that program monitoring in this effort is lacking.13 SIGAR reports compiled over extended periods, as distinct from “snapshot” evidence like the Balkh school visits, have detailed other troublesome projects. Nearly a half-billion dollars’ worth of transport aircraft procured for the Afghans were found unfit for use and were scrapped for pennies a

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pound.14 Some buildings were built with concrete that dissolved in rain, or with walls and roofs that could collapse, or with unsafe wiring and inadequate plumbing.15 An $8.5 billion U.S. counternarcotics effort failed to prevent Afghan opium production from setting new records.16 At the governance level, U.S.-funded programs to build ministerial capacity, promote rule of law, and combat endemic corruption have had mixed results.

DIAGNOSING FAILINGS IS DIFFICULT BUT VITAL Government programs, GAO says, “must have an identifiable purpose or set of objectives if an evaluator is to assess how well the purpose or objectives are met”—and possibly assess “whether a program had unintended (perhaps undesirable) outcomes.”17 Unintended outcomes have often been an issue in Afghanistan, even if a program is completed on schedule and within budget, and attains all its stated objectives. Improving irrigation for farmers, for example, can also facilitate more opium-poppy cultivation and boost revenues for insurgents; eradicating poppy has alienated many farmers, who need the income; building and staffing more schools in remote areas can give insurgents opportunities to dictate teaching that promotes their ideology. The sheer scale of donor spending also has had unintended conse- quences. The International Monetary Fund has reported that “Significant off-budget spending by donors contributed to the buildup of a better-paid ‘parallel’ civil service, which demotivated the regular [Afghan] civil service and weakened program ownership.”18 The way government agencies structure their operations, execute their programs, and document their results may frustrate efforts to assess their success. According to the Congressional Research Service, “Historically, most foreign assistance programs are never evaluated for the purpose of determining their impact, either at the time of implementation or retrospectively.”19 Analysts at the independent Center for Global Development, for example, have found that USAID “does not systematically collect data, lacks basic metrics for comparing programs, and relies on contractors who do not report on subcontractors, which makes it impossible to compare project performance.” The Center noted, however, that USAID has been chronically under-resourced and has to follow congressional and presidential directives that commit it to specific activities.20 Systematic approaches to monitoring and evaluation are required by statute and are part of Office of Management and Budget guidance to federal agencies. Compliance, however, is mixed. GAO, in September 2016, Workers install concrete for a highway reported that “All the agencies we reviewed, except DOD, have established project in southeast Afghanistan. [monitoring and evaluation] policies that apply to their major foreign assis- (USAID photo) tance programs.” DOD said it was developing the policies.21

8 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION REPRIORITIZING AFGHANISTAN

Workers assemble a tower for an electrical project to connect regional transmission systems. (USAID photo)

Government programs would benefit from better documentation and reporting leading to more and better evaluations. However, this also requires recognizing and mitigating the impulses of human nature. The Congressional Research Service noted that foreign assistance officials tend to “avoid formal evaluation for fear of drawing attention to the shortcomings of the programs on which they work” which could have “personal career implications, such as loss of control over a project, damage to professional reputation, budget cuts,” or other repercussions.22 Obtaining frank, fresh, and full reviews is difficult, but can pay huge dividends. In 2013, SIGAR identified 52 military construction projects that appeared unlikely to meet a December 2014 completion deadline before being handed off to the ANDSF. The Combined Security Transition Command-Afghanistan (CSTC-A) had identified only one such project. After meeting with SIGAR, CSTC-A launched a reassessment that found up to 47 projects might still be under construction at the deadline. After scrubbing the list for projects that were no longer needed or could be downsized, and after its own routine reviews, CSTC-A reported a reduction of over $432 million in needed U.S. and coalition funding.23 But even such program-focused reviews are not enough. SIGAR believes that just as in the private sector, good management and responsible stew- ardship of taxpayer money also require that programs be compared among themselves. That is not only good common sense, but good business sense.

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COMPARISONS MUST FOLLOW EVALUATIONS Revisiting and possibly reprioritizing Afghanistan reconstruction requires more than simply accumulating individual program evaluations, no matter how scrupulous or candid. It also requires comparisons. A GAO report on evaluation design observes that one function of evaluation can be to “compare the performance of a program across time and to the performance of other programs or organizations to ascertain whether it is more or less effective than other efforts to achieve a given objective.”24 (Emphasis added.) That point was made explicit in guidance the Office of Management and Budget issued to executive agencies in 2012: Agencies are encouraged to include measurement of costs and costs per outcome as part of the routine reporting of funded programs to allow for useful comparison of cost effectiveness across programs. . . such a [return-on-investment] analysis can improve agency resource allocation and inform public understanding.25 (Emphasis added.)

SIGAR made that need for comparative-evaluation part of its oversight approach in 2013. In what became known as the “Top 10” letter to the Secretaries of State and Defense, and to the Administrator of USAID, Special Inspector General John F. Sopko asked the officials to submit their selec- tions of each agency’s 10 most and 10 least successful programs or projects. The request met agency resistance based on the difficulties of making comparisons among many different types of operations and over an extended period of time. Acknowledging that difficulty, SIGAR responded with a July 5, 2013, request for each agency to identify 10 “more successful” and 10 “less successful” programs. The agencies deflected this request, too. Nonetheless, SIGAR believes comprehensive and comparative evaluations are important tools. As the Special IG’s July 5, 2013, letter noted: The State/USAID response explicitly said, “we do not compare individual projects against others.” . . . [Yet] program evaluation inevitably entails or at least facilitates comparisons of projects. If not, what basis would agency managers have for deciding—say, in the face of budget cuts, sequestrations, or new mission directives—which projects to prioritize, expand, contract, terminate, transfer, or redesign? How do they decide which project managers deserve greater responsibility or career advancement, or the obverse, without comparing outcomes? How do they capture lessons learned to improve agency performance without making comparisons?26

Four years later, the state of affairs in Afghanistan and in the federal budget process make those concerns and questions more relevant than ever. In private conversations with SIGAR, USAID officials, for example, have suggested that USAID is considering shifting focus and resources away from broad-reach “nation-building” and institutional capacity-building

10 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION REPRIORITIZING AFGHANISTAN

approaches, to more targeted efforts for relieving poverty, empowering women, promoting economic growth, and encouraging civil and political engagement, especially in urban centers and more secure areas. To the extent such shifts may occur—whether driven by policy changes in pragmatic tactical adjustment, or budgetary force majeure, the need for a full, formal assessment of Afghanistan reconstruction is compelling. A fresh, frank look at the reconstruction program in Afghanistan with the possible result of a new selection and prioritization of efforts will be a useful undertaking. The process should extend to all agencies working on reconstruction in Afghanistan. As the Congressional Research Service (CRS) said in its latest update of its report, Does Foreign Aid Work?, “for maximum learning, an effort must be made at the cross-agency or even whole-of-government level.”27 The CRS observation is sound. But like other inspectors general, SIGAR has no executive authority over federal departments. Inducing agencies to produce the information needed for a fresh, frank, and full review of Rula Ghani, First Lady of Afghanistan, the U.S. reconstruction effort in Afghanistan requires direction from the speaks at a graduation ceremony for one of the Promote programs to assist Afghan President and relevant committees in Congress. women. (USAID photo)

WHAT SHOULD THE WHITE HOUSE AND CONGRESS REQUIRE? Given the mission challenges of reduced military presence in Afghanistan, continued stress on the Afghan government, multi-billion-dollar aid pledges stretching years into the future, and possible cuts in the U.S. foreign-assistance budget—the March 2017 White House budget proposal includes a 31% drop in funding for the State Department and U.S. Agency for International Development (USAID)28—SIGAR believes that the President and Congress should consider taking appropriate steps to require the principal agencies involved in Afghanistan reconstruction work to: 1. Identify stronger and weaker programs: Address the modified “Top 10” question posed by SIGAR in 2013, stating what each agency considers to be 10 more- and 10 less-successful programs, indicating the factors that support the judgments, and focusing on qualitative outcomes rather than simply quantitative outputs. Any department unable or unwilling to produce such ratings should be asked to explain how, in the absence of systematic tools for comparison, they can make informed management decisions on program resourcing, modification, or triage if budget constraints forced such decisions. 2. Prepare for triage: Indicate what programs could be reduced, postponed, or cancelled if budget constraints required; how the analysis was conducted; and whether any such actions would adversely affect other agencies’ operations in Afghanistan or attainment of U.S. policy objectives there.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 11 REPRIORITIZING AFGHANISTAN

USAID’s Stability in Key Areas-South program features live-theater performances on themes of governance, development, and community engagement. (USAID photo)

3. Clean up practices: Following sound private-sector business practices, explain what steps have been or are being taken to ensure that major reconstruction programs for Afghanistan have (a) clear objectives, measurable benchmarks, and sustainable end states; (b) consistent monitoring, documentation of outcomes as well as outputs, and accountability; (c) agreement on core reconstruction objectives and adequate coordination with other U.S. entities, Afghan institutions and civil society, other international donors, and with nongovernmental organizations; and (d) protections against losses to corruption or other abuse. 4. Prevent funding from reaching insurgents: Explain what steps have been or are being taken to prevent U.S. reconstruction funds from being diverted to, or inadvertently providing support to, the Taliban or terrorist networks. 5. Establish a counternarcotics strategy: A new U.S. government strategy to fight the narcotics trade in Afghanistan has been on hold for more than two years, and will need coordination with the host- country strategy approved by the Afghan parliament. Meanwhile Afghanistan remains the world’s leading producer of opium, and Resolute Support and U.S. forces commander General John W. Nicholson Jr. estimates that the Taliban receive 60% of their funding from the opium trade.29 6. Determine if capabilities need to be restored: Earlier initiatives toward “right-sizing” the U.S. military presence in Afghanistan and staffing at Embassy Kabul may have reduced or sacrificed important

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capabilities in countering terrorist threat financing, overseeing contracts, and other oversight areas. Without full and effective oversight, reconstruction cannot succeed.

Responding to these common-sense requirements will require a substantial effort by federal agencies’ staff, in addition to the continuing monitoring and evaluations of projects that they already perform. And further comparative and integrative analysis will be required of executive and legislative staff. But it is better to do the hard thinking and comparing now than to wait for events to force hurried and ill-considered action later. A frank top-to-bottom assessment and prudent readjustment of the reconstruction program could be a significant benefit to both the United States and Afghanistan, whether by improving the outcomes of current initiatives, raising their cost-effectiveness, or optimizing approaches if funding is cut. As Abraham Lincoln said in his 1858 “A House Divided” speech, “If we could first know where we are, and whither we are tending, we could then better judge what to do, and how to do it.”30

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 13 “The number one reason for the misuse of U.S. taxpayer dollars has been that we spent too much money, too fast, in too small an economy, with too little oversight.”

—Deputy Inspector General Gene Aloise

Source: SIGAR, “Prepared Remarks of Gene Aloise, Deputy Special Inspector General for Afghanistan Reconstruction” Naval Postgraduate School, Monterey, California, 4/7/2017. SIGAR 2OVERSIGHT

15 SIGAR OVERSIGHT ACTIVITIES

CONTENTSSIGAR OVERSIGHT CONTENTS

Quarterly Highlight: SIGAR Continues Oversight Work Despite Security Concerns 18 Audits 20 Inspections 35 Special Projects 42 Quarterly Highlight: Director of Special Projects Meets with Afghan Minister of Public Health to Set Up Information-Sharing Arrangements 45

Lessons Learned 48 Investigations 49 Other SIGAR Oversight Activities 54 SIGAR Budget 57 SIGAR Staff 57

Photo on previous page Afghan President Ashraf Ghani, right, greets Special Inspector General John Sopko at the presidential palace in Kabul. (Palace photo)

16 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES

SIGAR OVERSIGHT ACTIVITIES COMPLETED PERFORMANCE AUDITS • Audit 17-27-AR: USAID’s Land Reform in This quarter, SIGAR issued 16 audits, inspections, special projects, and Afghanistan other products. SIGAR work to date has identified approximately $2.1 bil- • Audit 17-40-AR: DOD’s Afghan National Defense and Security Forces Oversight of lion in savings for the U.S. taxpayer. Uniforms and Equipment SIGAR published two performance audit reports this quarter. These audits examined the impact and sustainability of the U.S. Agency for COMPLETED FINANCIAL AUDITS International Development’s (USAID) Land Reform in Afghanistan (LARA) • Financial Audit 17-31-FA: Afghanistan Mine, Battle Area and Range Clearance program and the Department of Defense’s (DOD) management and over- Operation-Phase II, Effort I sight of organizational clothing and individual equipment, which includes • Financial Audit 17-33-FA: USAID’s uniforms, helmets, body armor, boots, and sleeping bags for the Afghan Financial Access for Investing in the Development of Afghanistan Project National Defense and Security Forces (ANDSF). • Financial Audit 17-35-FA: USAID’s SIGAR completed five financial audits of U.S.-funded contracts, grants, Kandahar Food Zone Program and cooperative agreements to rebuild Afghanistan. These financial audits • Financial Audit 17-38-FA: USAID’S Tracking Phase II (SUPPORT II) Program identified more than $7.3 million in questioned costs as a result of internal- • Financial Audit 17-39-FA: USAID’S control deficiencies and noncompliance issues. To date, SIGAR’s financial Commercial Horticulture and Agriculture audits have identified more than $387 million in questioned costs. Marketing Program SIGAR also published two inspection reports. These reports examined COMPLETED INSPECTION REPORTS the Baghlan prison and the women’s dormitories at Balkh University. • Inspection Report 17-36-IP: Baghlan SIGAR’s Office of Special Projects issued seven products examining a Prison range of issues including locations and operating conditions at 30 USAID- • Inspection Report 17-41-IP: Balkh supported public health facilities in Ghazni Province; the general usability University Women’s Dormitories and potential structural, operational, and maintenance issues for 26 schools COMPLETED SPECIAL PROJECT in Balkh Province; and six Bureau of International Narcotics and Law PRODUCTS Enforcement Affairs (INL)-funded Good Performers Initiative infrastructure • Special Project Review 17-26-SP: Good projects in Ghazni Province. Performers Initiative During the reporting period, SIGAR investigations resulted in three • Special Project Review 17-32-SP: Schools in Balkh Province criminal information charges, two convictions, one sentencing, $150,000 • Special Project Review 17-34-SP: in restitutions, and a civil settlement of $40 million. Additionally, SIGAR USAID Supported Health Facilities in initiated 15 cases and closed 14, bringing the total number of ongoing inves- Ghazni Province tigations to 262. • Special Project Review 17-37-SP: Good Performers Initiative This quarter, SIGAR’s suspension and debarment program referred 12 • Special Project Inquiry Letter 17-28-SP: individuals and 16 companies for debarment based on evidence developed DOD Infrastructure Projects as part of investigations conducted by SIGAR in Afghanistan and the United • Special Project Inquiry Letter 17-29-SP: State Infrastructure Projects States. These referrals bring the total number of individuals and companies • Special Project Inquiry Letter 17-30-SP: referred by SIGAR since 2008 to 837—encompassing 465 individuals and USAID Infrastructure Projects 372 companies to date.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 17 QUARTERLY HIGHLIGHT

SIGAR CONTINUES OVERSIGHT WORK DESPITE SECURITY CONCERNS

SIGAR continues to fulfill its mandate to inspect, inves- SIGAR’s cooperation with all of those with whom tigate, and audit U.S.-funded reconstruction activities the agency works has only become stronger. SIGAR across Afghanistan despite significant security chal- remains the only U.S. oversight organization still lenges. Gone are the days when dozens of U.S. bases conducting inspections of U.S.-funded reconstruc- and tens of thousands of foreign troops dotted the tion infrastructure in Afghanistan. Its site visits have countryside with secure outposts and helicopter landing documented issues including ghost soldiers and police, zones. The evolving landscape has altered but not halted widespread corruption, weak leadership, and shoddy SIGAR’s work. or unnecessary construction. The knowledge SIGAR With robust support from U.S. Embassy Regional has gained from this access has improved its analysis Security Officer (RSO) Carlos Matus and his team of and reports and has been appreciated by Congress protection and movement specialists, SIGAR continues and U.S. and Afghan policymakers. to visit Afghan government offices, construction and IG Sopko’s most recent visit to Afghanistan provided project sites, and select locations outside the Kabul area. a good example of SIGAR’s ability to perform this mis- It would be impossible for SIGAR to conduct this work sion with the support of the RSO and NATO forces. Over without the RSO’s protective support services. Similarly, the course of two weeks in February, the IG conducted SIGAR’s positive relations with Resolute Support more than 20 meetings and other engagements outside (RS) commander General John W. Nicholson Jr., with the U.S. embassy compound. A visit to the German- Combined Security Transition Command-Afghanistan commanded TAAC-North in Mazar-e Sharif involved (CSTC-A) commander Major General Rick Kaiser, and travel on Embassy Air, and then a 45-minute drive in with others on the RS team have enabled regular inspec- armored vehicles to the headquarters of the 209th Corps. tion visits to the four NATO train, advise, and assist This offered the chance to witness the biometric regis- commands (TAAC) located in Balkh, Kandahar, Herat, tration of Afghan soldiers as part of an expanded effort and Laghman Provinces, and to Bagram Airfield. by CSTC-A and the Ministry of Defense to ensure that As the hard truths about past weaknesses in the the Army’s personnel rolls are both accurate and cred- U.S. reconstruction effort have sunk in more broadly, ible. Embassy Air moved the IG and his team to conduct

IG Sopko and his team board air transport to meet Afghan IG Sopko meets with officers of the Afghan 209th Corps and officials at the new Ministry of Interior complex in Kabul. officers of a German-led team from the Train Advise Assist (SIGAR photo by Tom Niblock) Command in Mazar-e Sharif. (SIGAR photo by Tom Niblock)

18 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION QUARTERLY HIGHLIGHT

IG Sopko meets with Afghan prosecutors and judges at the Anti- U.S. soldiers provide security for SIGAR inspectors at the new Corruption Justice Center and Major Crimes Task Force in Kabul. Ministry of Interior complex in Kabul. (SIGAR photo by Aziz Zaki) (SIGAR photo by Charles Hyacinthe) meetings at the new Ministry of Interior complex, which IG Sopko in attending the commission meeting, where has been the focus of SIGAR inspection work. From he met with the president and chief executive and a there, the team went on to the Anti-Corruption Justice number of ministers to discuss procurement issues. Center (ACJC) and Major Crimes Task Force (MCTF) Among SIGAR’s most constructive relationships are to meet with Afghan police, prosecutors, and judges. those it has established with other key donor coun- Sadly, only weeks after this visit, two of the MCTF inves- tries. With the assistance of the RSO, SIGAR staff travel tigators were assassinated in Kabul, but this vital work weekly to meet with foreign diplomatic colleagues. No goes on. Another planned helicopter movement to visit visit by the IG to Afghanistan is ever complete without U.S. forces in Gamberi at TAAC-East was scrubbed only a full slate of talks with ambassadors of donor nations. when winter weather closed in, blocking travel through The most recent round included an event hosted by the high mountain passes. Canadian Ambassador Ken Neufeld where ambassa- At the Ministry of Defense, IG Sopko received a com- dors and other senior officials from the EU, the United prehensive briefing from Minister Abdullah Khan Habibi Nations, and other embassies exchanged their own expe- on the outlines of the new joint NATO and Afghan four- riences that enhance SIGAR’s on-the-ground knowledge year plan to bolster Afghan security forces and stem of current conditions in country. During his two-week the spread of the insurgency. Meeting at the Ministry of visit, the RSO also provided protective details that per- Public Health, Minister Dr. Ferozuddin Feroz thanked mitted the IG to meet with the ambassadors and staff of SIGAR for its ongoing effort to document shortcomings the German, British, and Danish embassies to further in Afghanistan’s public health enterprise and pledged to discuss areas of mutual concern. continue close collaboration going forward to achieve Finally, SIGAR works and meets with a multitude better results for the Afghan people. of Afghan partners, non-governmental organizations The IG paid office calls on both President Ashraf (NGOs), and opinion leaders, some of whom would Ghani and Chief Executive Dr. Abdullah Abdullah, con- prefer to remain unnamed. It is often in these informal tinuing what has been a steady and very constructive engagements that SIGAR staff pick up new ideas for conversation with both leaders since the Government of inquiries or confirmation that the agency is on track with National Unity came into office in 2014. Senior SIGAR ongoing efforts. Many are in locations seldom visited staff continue to be regular observers at the weekly by other official personnel and this always requires an meetings of the National Procurement Commission, extra degree of coordination and planning. Thanks again which is chaired by President Ghani and includes other to those U.S. Embassy and RS officials who make these senior Afghan officials. The RSO security detail assisted outside engagements possible.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 19 SIGAR OVERSIGHT ACTIVITIES

AUDITS SIGAR conducts performance audits, inspections, and financial audits of programs and projects connected to the reconstruction effort in Afghanistan. Since its last report to Congress, SIGAR has issued two performance audits, five financial audits, and two inspection reports. This quarter, SIGAR has 13 ongoing performance audits. Performance Audit Reports Published SIGAR published two performance audit reports this quarter. These audits examined the impact and sustainability of USAID’s LARA program and COMPLETED PERFORMANCE AUDITS DOD’s management and oversight of organizational clothing and individual • Audit 17-27-AR: USAID’s Land Reform in Afghanistan equipment, which includes uniforms, helmets, body armor, boots, and sleep- • Audit 17-40-AR: DOD’s Afghan National ing bags, for the ANDSF. Defense and Security Forces Oversight of Uniforms and Equipment Performance Audit 17-27-AR: Land Reform in Afghanistan Full Impact and Sustainability of $41.2 Million USAID Program is Unknown According to land-reform experts, in Afghanistan, as in other developing countries, land administration is critical to economic growth and security. Since 2004, USAID has supported efforts to address land reform and land tenure in Afghanistan because of their effects on the economy and the lives of the Afghan people. According to a U.S. Institute of Peace land expert, the majority of Afghans do not have proper legal documentation for their land ownership, due in part to poor paper records and land titles. To address these problems and to help the Afghan government develop a sound land administration system, USAID spent a total of $96.7 million from 2004 through 2014 to reform the existing system. The agency initiated its most recent effort, LARA, when it awarded the contract to implement the program to Tetra Tech ARD in January 2011. The contract ended in November 2014 and cost $41.2 million. The objectives of this audit were to assess the extent to which: (1) USAID and Tetra Tech ARD measured the LARA program’s performance and whether it achieved its goals and objectives; (2) USAID conducted its required oversight of the contract; (3) USAID and Tetra Tech ARD designed and assessed LARA’s sustainability; and (4) the challenges USAID, Tetra Tech ARD, and the Afghan government faced threaten the sustainment of U.S. land reform efforts. SIGAR found that USAID and Tetra Tech ARD did not fully measure the LARA program’s performance. Without such information, the agency cannot demonstrate the full extent to which LARA achieved its goals and objectives, or the impact the $41.2 million program had on improving land administration in Afghanistan. Delays by Tetra Tech ARD in submitting and USAID in approving key performance monitoring and evaluation documentation limited the contractor’s and the agency’s ability to track program performance. Tetra Tech ARD did not submit an approved performance monitoring plan until February

20 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES

2012, more than a year after the contract was awarded and 11 months after it was due according to the contract. Therefore, USAID and Tetra Tech ARD did not have a detailed plan for how Tetra Tech ARD would accomplish the program’s requirements, objectives, and goals, or collect detailed information on LARA’s performance and progress during its first year. In addition, Tetra Tech ARD never reported on six key performance indicators that measured the impact of LARA. Finally, Tetra Tech ARD did not monitor and report on LARA’s performance consistently, as recommended by USAID guidance and required by the contract. USAID officials told SIGAR that they relied on Tetra Tech ARD and evaluations performed by Ernst & Young and Checchi and Company Consulting Inc. However, the evaluations show that Tetra Tech ARD’s monitoring was inconsistent, and SIGAR independently confirmed that finding. Moreover, the extent to which USAID conducted contract oversight, required by the Federal Acquisition Regulation and USAID, is unknown because the agency did not maintain complete records of Tetra Tech ARD’s performance or its own oversight of the LARA contract. Although SIGAR found that Tetra Tech ARD completed eight of nine contract deliverables, it was unable to rely on the agency’s contract files due to the agency’s poor record keeping and had to seek additional information from Tetra Tech ARD. When asked, USAID did not have an explanation for why documents were missing from its contract files. Therefore, SIGAR questions how the agency was able to determine that the three LARA deliverables were completed when it closed out the contract. In addition, although USAID provided SIGAR with records and evidence of its oversight of LARA from August 2011 through September 2013, it did not provide documentation for oversight it should have performed from September 2013 through November 2014, when the program ended, accounting for more than a year—or one-fourth—of the contract duration. Without complete records for the LARA contract, the agency cannot demonstrate that it fully performed its required contract oversight of Tetra Tech ARD or confirm that the contractor met all of the terms of the $41.2 million LARA contract. Further, USAID did not, as required by its own internal guidance, fully assess the sustainability of LARA. USAID designed LARA to consider some elements of sustainability and addressed some sustainment objectives, as required by the 2011 Administrator’s Sustainability Guidance for USAID in Afghanistan and other agency directives. However, the agency did not comply with other requirements of the 2011 sustainability guidance in that sustainability assessments include an “examination, both immediate and ongoing, of all USAID Mission for Afghanistan projects against the principles of (1) Afghan ownership and capacity, (2) their contribution to transition and confidence, and (3) cost effectiveness and program effectiveness.”

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USAID completed an initial sustainability assessment in June 2012 to report on all of its programs in Afghanistan, in which it stated that LARA “most closely emulate[s] the standards that USAID seeks to promote in all of its programming” about sustainability. However, this analysis primarily addressed whether LARA’s overall program design met agency sustainability standards and did not discuss whether the Afghan government could sustain ongoing program efforts. USAID did not conduct subsequent sustainability assessments that address all the requirements in the 2011 sustainability guidance for LARA from June 2012 to the close of the program in November 2014, which amounted to a majority of the program’s implementation period. In its January 2017 response to SIGAR’s draft report, the USAID Mission for Afghanistan stated that Checchi’s November 2014 final performance evaluation of LARA, completed upon the program’s conclusion, also represented a sustainability assessment, in accordance with the June 2011 Administrator’s Sustainability Guidance for USAID in Afghanistan. However, SIGAR maintains that USAID did not fully address all of the requirements in the 2011 sustainability guidance. For example, the 2014 final performance evaluation does not provide an “examination, both immediate and ongoing” of the LARA program’s “cost effectiveness and program effectiveness” and does not “estimate all recurrent costs [for LARA] required to maintain the services, infrastructure, and institutions, as well as ongoing capacity building investments … [and/ or] Develop plans in partnership with GIRoA [Government of the Islamic Republic of Afghanistan], and other donors to ensure such costs are priorities and are within budgets in a scarce resource environment,” all of which the guidance requires. Without such assessments, the U.S. government has less insight into whether the reported achievements associated with its $41.2 million investment in land reform can be maintained. According to USAID, Tetra Tech ARD, and Afghan government officials, known systemic challenges in land reform pose a threat to sustaining the program’s achievements. The challenges include (1) political and judicial corruption; (2) an underdeveloped legal system and lack of enforcement mechanisms to support land laws and property rights; and (3) a lack of Afghan government technical capacity, including the ability to use land administration information technology systems. The U.S. government currently does not have any planned programs that are specifically intended to support land reform in Afghanistan. Nevertheless, by not performing a sustainability assessment of LARA, USAID missed an opportunity to inform the Afghan government about how it could address these systematic challenges in the future. To better understand the impact of the LARA program on land reform efforts in Afghanistan, SIGAR recommended that the USAID Administrator, in accordance with all of the requirements of the June 2011 Administrator’s

22 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES

Sustainability Guidance for USAID in Afghanistan, conduct a final sustainability assessment of the LARA program to fully determine whether sufficient capacity exists for the Afghan government to sustain the program’s achievements, and provide the results to the Afghan government.

Performance Audit 17-40-AR: Afghan National Defense and Security Forces DOD Needs to Improve Management and Oversight of Uniforms and Equipment Developing Afghanistan’s security forces into a strong, sustainable force is a top priority for the U.S. government. To support this effort, from fiscal years (FY) 2002 through 2016, Congress appropriated approximately $64 billion to the Department of Defense (DOD) to train and equip the Afghan National Defense and Security Forces (ANDSF), which consists primarily of the Afghan National Army (ANA) and Afghan National Police (ANP). These efforts included providing organizational clothing and individual equipment (OCIE) to the ANDSF. OCIE includes items such as uniforms, helmets, body armor, boots, and sleeping bags. From 2010 to 2014, DOD spent more than $415 million to purchase these items. Within the U.S. government, the Combined Security Transition Command-Afghanistan (CSTC-A) is the DOD entity responsible for overseeing U.S. efforts to supply the ANDSF with clothing and equipment. The objectives of this audit were to assess the extent to which DOD: (1) developed and validated clothing and equipment requirements for the ANDSF; (2) provided clothing and equipment in accordance with ANDSF needs; and (3) provided oversight and accountability for clothing and equipment, and funds transferred to the Afghan government. CSTC-A’s ability to develop and validate clothing and equipment requirements for the ANDSF is limited by poor data, reliance on questionable assumptions, and a lack of clear roles and responsibilities. CSTC-A receives data from the Afghan government on ANDSF personnel numbers, consumption rates, and inventory levels, but the command acknowledged that this data is often inaccurate and therefore unreliable. Because CSTC-A could not rely on the Afghan government for accurate data, it defaulted to using problematic assumptions and estimates when cal- culating the Afghan military’s annual clothing and equipment replenishment needs. For example, Coalition officials assume that the Afghan military operates at full capacity each year, consuming its entire clothing and equipment allotment without any surplus items remaining. Given CSTC-A’s history of delivering large shipments of clothing and equipment, the fact that the reported number of soldiers and police in the ANDSF is lower than what is authorized, and DOD’s own reports of unopened shipping crates with clothes that are not reflected in the ANDSF’s official inventories, it is unlikely that the ANDSF is using all of its clothing and equipment every year. Even though CSTC-A’s reliance on some

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 23 SIGAR OVERSIGHT ACTIVITIES

assumptions and estimates like this one may be necessary given the lack of reliable data, opportunities exist to more accurately define the clothing and equipment requirements of the ANDSF. Furthermore, SIGAR found that CSTC-A did not document roles and responsibilities in the acquisition process after the multinational coalition’s combat operations ended in 2014. At that time, the Coalition redistributed clothing and equipment procurement functions among several entities, without formally documenting the roles and responsibilities of those entities. DOD officials stated that Essential Function 5 (EF-5), the organization responsible for determining ANA and ANP clothing and equipment requirements and submitting orders, does not have logisticians on staff who specialize in OCIE, increasing the risk that it will order the wrong items at the wrong times. In one case, a DOD official noted that confusion about who should be ordering uniforms became so severe that U.S. Special Forces had to execute an emergency order for the Afghan special forces because no other Coalition organization knew that there was a shortage. SIGAR found that each of CSTC-A’s three methods for acquiring clothing and equipment—local acquisition, direct assistance, and pseudo Foreign Military Sales (FMS)—had mixed results that led to shortages and dis- ruptions in the supply chain. CSTC-A provided clothing and equipment primarily through local acquisitions between 2008 and 2012, and through direct assistance between 2012 and 2013. The command supplemented these acquisitions with pseudo FMS orders, a method it has continually used since 2003. (The term “pseudo” preceding “FMS” refers to purchases where the United States consults with a partner country on needs, but funds, obtains, and delivers equipment on the partner’s behalf, in contrast to other foreign sales of military items. Pseudo FMS is elsewhere known as the Building Partner Capacity program.) DOD officials who formerly worked within or in support of CSTC-A said they saw several problems with the quality of the goods local Afghan vendors provided. SIGAR was able to identify 187 contract actions issued since January 1, 2010. Of these 187 contract actions, Army Contracting Command-Rock Island could only provide contract files for 113. Of the 113, SIGAR analyzed files for only the 97 that involved financial transactions. For these 97 files, SIGAR found evidence that some vendors supplied poor- quality goods and did not meet scheduled delivery dates. Poor recordkeeping was evident from the beginning of the analysis because it took multiple steps to develop a list of local acquisition contracts. When asked about the 74 files not provided, the Closeout Office at Rock Island said that DOD’s contingency contracting offices might not have sent them, some could have been destroyed in Afghanistan, and others could have been lost in transit. In several cases, SIGAR found memos stating that some documents were stored electronically on local serv- ers in Afghanistan or were set aside with the intent to upload them to

24 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES

global online systems. However, Army Contacting Command staff said they did not receive any electronic records for the contracting actions SIGAR reviewed. Despite the poor state of the local acquisition contract records, SIGAR found documents indicating instances in which CSTC-A encountered problems getting well-made items on time. For example, nine of the 97 contract actions we reviewed were terminated for convenience or cancelled. In two of the nine, SIGAR found documentation stating the “contractor had performance issues throughout the span of the contract, and stopped performing.” In a third case, the termination officer wrote that the contractor did not deliver items in conformance with the contract specifications and delivered fewer items than ordered. In 2012, CSTC-A began providing direct assistance to the MOD and the MOI to purchase clothing and equipment, with the goal of shifting all ordering responsibility to the ministries by the end of 2014. However, less than a year later, the ANDSF faced critical shortages of uniform shirts, uniform pants, cold-weather coats, and other clothing. One Coalition official said that in anticipation of the transition to the Resolute Support Mission in 2014, the Coalition transferred many systems and responsibilities to the MOD and the MOI before the Afghans were ready to handle them. Although a September 2013 CSTC-A memorandum judged direct assistance for clothing and equipment a success, other evidence indicated that problems had already surfaced. For example, a December 5, 2012, memorandum from the Special Operations Joint Task Force for Afghanistan to CSTC-A stated that the MOI did not place orders for critically needed Afghan Local Police field jackets, despite Coalition advisors’ urging. According to Coalition officials, the Afghan government tended to favor the cheapest contracts, even when they resulted in items that did not meet minimum quality standards. In 2013, the Afghan government cancelled all of its clothing and equipment contracts because it did not award these contracts in time to avoid changes to U.S. requirements that any textile components used to make Afghan uniforms funded by DOD must be produced in the United States. Although the Afghan government requested a waiver for contracts that had already gone through the bidding process, CSTC-A officials told us that they were legally required to deny the ministries’ requests for waivers. According to Coalition advisors, the ministries’ mass cancellation of its contracts com- pounded ongoing clothing shortages. As of summer 2013, the gap between the ANDSF’s estimated need and existing inventories appeared to be substantial. According to EF-5 records, the ANP “had gone without proper uniforms for two years” and were “approaching [their] third winter without proper uniforms.” At that time, the ANP had only 21,951 uniform shirts and pants in stock, instead of its estimated annual need of 137,766, and 26,207 cold-weather coats, instead of its estimated annual need of 88,331.

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Beginning in June 2013, CSTC-A shifted from direct assistance back to procuring all ANDSF clothing and equipment through pseudo FMS orders. However, CSTC-A was caught unprepared because its local acquisition office had been dissolved following the shift to direct assistance. Without the local acquisition office’s institutional knowledge, Coalition officials wasted several months searching through old records in an attempt to re- create the ANDSF’s uniform specifications. Because CSTC-A was unable to get uniforms and winter clothing to the ANDSF on time, shortages that occurred during the 2012–2013 phase of direct assistance continued or intensified. For example, SIGAR found that winter clothes continued to be in short supply in 2015. In September 2015, SIGAR sent an alert letter to DOD notifying officials there that they had not shipped any winter clothes for the ANA in the past two years. For the ANP, SIGAR found that although CSTC-A had ordered some winter items, such as wool sweaters and underwear, it did not order enough to meet annual replenishment requirements. In response to the alert letter, DOD recognized the shortages of cold-weather clothing and said it would begin delivering winter clothing in late 2015. DOD later told us that these items had been ordered and began arriving in December 2015. Additional problems occurred because CSTC-A’s attempts to address the shortages led to over-ordering and inventory surpluses. According to EF-5’s forecasting models, pieces of clothing and equipment need to be replaced every one to two years. However, rather than delivering annual replenishment rates in anticipation of requirements based on these forecasting models, CSTC-A has been reacting to emergency shortages for many of these items. For example, 34,500 helmets for the ANP were due to arrive in 2016, more than 10 times what EF-5’s forecasting models indicate the ANP needs annually, and, as already discussed, these forecasting models may be overestimating needs. Similarly, 252,172 ANA cold-weather coats are set to be delivered in 2017, more than enough to provide one to each of the 171,428 troops reported to be in the ANA. The remaining 80,744 coats would create a 47% inventory surplus. Coalition advisors and DOD officials offered three possible reasons why CSTC-A has ordered too few items in some cases and ordered too many items in others: (1) The Afghan government’s unreliable personnel, inventory, and consumption reporting makes it difficult for Coalition advisors to forecast how much clothing and equipment the ANA and ANP needs in any given year. (2) No one organization is a proponent for the ANA and ANP, and the Coalition lacks trained logisticians with experience in clothing and equipment acquisitions. Because Coalition officials lack familiarity with pseudo FMS timelines and costs, they are not aware of time- and cost- saving options available to them, such as using excess defense articles. Furthermore, clothing and equipment frequently goes unordered until the

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Afghan government reports acute shortages. In those cases, because FMS can take more than a year from order to delivery, waiting until the last minute to order items often exacerbates these shortages. (3) Although CSTC-A officials are responsible for tracking incom- ing shipments and receipts of clothing and equipment, no one conducts routine analyses of the data to look for potential surpluses or shortfalls. Without such analysis, CSTC-A is missing an opportunity to adjust its ship- ment schedules, so that clothing and equipment shipments both meet the Afghan government’s needs and arrive at a pace that does not overwhelm their system. In addition, SIGAR found that CSTC-A did not demonstrate that it conducted effective oversight and accountability of clothing and equipment and funds transferred to the Afghan government. CSTC-A is required to document the dates of all receipts and title transfers of clothing and equipment shipments in the Security Cooperation Information Portal, an online platform for coordinating FMS case information across U.S. military departments and with their international customers. However, based on a judgmental sample of 7,798 shipments between April 2015 and October 2016 containing 5,047,824 discrete pieces of clothing and equipment, SIGAR found that CSTC-A confirmed receipt and title transfer for only 1,680,486, or about 33%, of those items. CSTC-A is also required to retain signed forms showing that the command received, inspected, and transferred the titles of clothing and equipment to the MOD and the MOI. SIGAR reviewed a random sample of 65 clothing and equipment shipments purchased through the pseudo FMS system from 2012 to 2015, and found that CSTC-A was able to provide this documentation for 41 shipments, or 63%. Coalition officials attributed their inability to provide all required documentation to poor organization and delays in transferring paper records to electronic records, stating that they may have physical copies of the forms, but could not find them. Without readily accessible documentation, CSTC-A cannot determine whether the Afghan government received the clothing and equipment shipped to them by the U.S. government. Finally, SIGAR found that the Afghan government could not track clothing and equipment purchased using direct assistance from 2012 to 2013. Because CSTC-A did not enforce the conditions established in commitment letters requiring the MOD and the MOI to use electronic systems to track clothing and equipment purchases, the command cannot say how much clothing and equipment the ministries bought with U.S. money. CSTC-A officials said they chose not to enforce these requirements because the mission to fully equip the ANDSF superseded their mission to improve the ministries’ financial-reporting practices. As a result, CSTC-A did not properly oversee the money given to the Afghan government for clothing and equipment.

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To ensure that an appropriate amount of clothing and equipment is purchased for the ANDSF, SIGAR recommended that the Commander of CSTC-A: (1) develop and implement corrective action plans within 90 days to improve clothing and equipment requirements’ forecasting models to better reflect ANA and ANP personnel, inventories, and consumption rates; (2) document and implement guidance clarifying the roles and responsibilities for the Coalition and Afghan government organizations involved in the clothing and equipment supply process, and clarifying the individual training required for identifying, assessing, reviewing, and validating requirements for acquiring clothing and equipment; (3) assess projected delivery dates for all active pseudo FMS orders and orders from other sources of clothing and equipment, and adjust these orders when necessary to avoid under- or oversupply; (4) complete, as soon as possible, the transition of archived receipt and title transfer records from paper to electronic, consistently document these records electronically in the future, and develop a system to automatically update the Security Cooperation Information Portal verifying when FMS orders have been received in Afghanistan; and (5) develop and implement enforcement mechanisms so that the command holds the MOD and the MOI accountable for supporting and keeping personnel and inventory databases up-to-date under pseudo FMS, or direct assistance, if the Coalition returns to this acquisition approach. Financial Audits SIGAR launched its financial-audit program in 2012, after Congress and the oversight community expressed concerns about oversight gaps and the growing backlog of incurred-cost audits for contracts and grants awarded in support of overseas contingency operations. SIGAR competitively selects independent accounting firms to conduct the financial audits and ensures that the audit work is performed in accordance with U.S. government auditing standards. Financial audits are coordinated with the federal inspector-general community to maximize financial-audit coverage and avoid duplication of effort. This quarter, SIGAR completed five financial audits of U.S.-funded con- TABLE 2.1 tracts, grants, and cooperative agreements to rebuild Afghanistan. The audits question expenditures that cannot be substantiated or are potentially SIGAR’S FINANCIAL AUDIT unallowable. SIGAR has 25 ongoing financial audits with $792.6 million in COVERAGE ($ BILLIONS) auditable costs, as shown in Table 2.1. 91 Completed Audits $7.0 SIGAR issues each financial-audit report to the funding agency that 25 Ongoing Audits $0.8 made the award(s). The funding agency is responsible for making the final Total $7.8 determination on questioned amounts identified in the report’s audit find- Note: Numbers have been rounded. Coverage includes auditable costs incurred by recipients of U.S.-funded Afghanistan ings. Since the program’s inception, SIGAR’s financial audits have identified reconstruction contracts, grants, and cooperative agreements. more than $387 million in questioned costs and $363,244 in unremitted

Source: SIGAR Audits and Inspections Directorate. interest on advanced federal funds or other revenue amounts payable to

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the government. As of March 31, 2017, funding agencies had disallowed nearly $25.6 million in questioned amounts, which are subject to collection. Questioned amounts: the sum of It takes time for funding agencies to carefully consider audit findings and potentially unallowable questioned costs recommendations. As a result, final disallowed cost determinations remain and unremitted interest on advanced to be made for several of SIGAR’s issued financial audits. SIGAR’s financial federal funds or other revenue amounts audits have also identified and communicated 336 compliance findings and payable to the government. 358 internal-control findings to the auditees and funding agencies. SIGAR’s financial audits have four specific objectives: Questioned costs: costs determined to • Express an opinion on whether the Special Purpose Financial be potentially unallowable. The two types Statement for the award presents fairly, in all material respects, of questioned costs are ineligible costs revenues received, costs incurred, items directly procured by the U.S. (violation of a law, regulation, contract, government, and balance for the period audited in conformity with the grant, cooperative agreement, etc., or an terms of the award and generally accepted accounting principles or unnecessary or unreasonable expenditure of funds) and unsupported costs (those not other comprehensive basis of accounting. supported by adequate documentation or • Evaluate and obtain a sufficient understanding of the audited entity’s proper approvals at the time of an audit). internal control related to the award; assess control risk; and identify and report on significant deficiencies, including material internal- Special Purpose Financial Statement: control weaknesses. a financial statement that includes all • Perform tests to determine whether the audited entity complied, in revenues received, costs incurred, and any all material respects, with the award requirements and applicable remaining balance for a given award during laws and regulations; and identify and report on instances of a given period. material noncompliance with terms of the award and applicable laws and regulations. • Determine and report on whether the audited entity has taken adequate corrective action to address findings and recommendations from previous engagements.

A list of completed and ongoing financial audits can be found in Appendix C of this quarterly report. COMPLETED FINANCIAL AUDITS Financial Audits Published • Financial Audit 17-31-FA: Afghanistan Mine, Battle Area and Range Clearance This quarter, SIGAR completed five financial audits of U.S.-funded con- Operation-Phase II, Effort I tracts, grants, and cooperative agreements to rebuild Afghanistan. These • Financial Audit 17-33-FA: USAID’s financial audits identified $7,301,539 in questioned costs as a result of inter- Financial Access for Investing in the Development of Afghanistan Project nal control deficiencies and noncompliance issues. Although one program • Financial Audit 17-35-FA: USAID’s was found to be in full compliance in all material respects, deficiencies and Kandahar Food Zone Program noncompliance issues identified in other programs included inadequate • Financial Audit 17-38-FA: USAID’S documentation to support selection and hiring of consultants, a failure Tracking Phase II (SUPPORT II) Program to perform checks to see if vendors were eligible to participate in U.S. • Financial Audit 17-39-FA: USAID’S Commercial Horticulture and Agriculture government-funded activities, and inadequate documentation to support the Marketing Program reasonableness of costs incurred by subcontractors.

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Financial Audit 17-31-FA: Afghanistan Mine, Battle Area, and Range Clearance Operation-Phase II, Effort I Audit of Costs Incurred by Janus Global Operations LLC On July 30, 2014, the U.S. Army Engineering and Support Center issued delivery order 0012, under contract number W912DY-10-D-0016, to Sterling Operations Inc. (Sterling) to fund Phase II, Effort I of the Afghanistan-wide Mine, Battle Area, and Range Clearance operation. The required tasks and performance objectives included performing technical and nontechnical surveys, subsurface clearance, and mine, battle area, and range clearance, with a period of performance from July 30, 2014, through December 31, 2015. After six modifications through December 31, 2015, the total cost of the delivery order increased from $70.9 million to $104.2 million, and the period of performance was extended to May 1, 2017. In April 2016, Sterling completed an organizational restructuring and changed its name to Janus Global Operations LLC (Janus). SIGAR’s financial audit, performed by Crowe Horwath LLP (Crowe), reviewed $85,849,096 in expenditures charged to the delivery order from July 30, 2014, through December 31, 2015. Crowe identified one significant deficiency and two material weaknesses in Janus’s internal controls, and three instances of noncompliance with the terms and conditions of the delivery order. Specifically, Janus provided inadequate documentation to support the reasonableness of costs incurred by two of its subcontractors. In addition, Janus did not invoice the U.S. government using the most current or accurate indirect-cost rates. Crowe also identified sole-source procurements that either lacked adequate justi- fications or did not meet price reasonableness cost principles, as required by federal regulations. As a result of these internal control weaknesses and instances of noncompliance, Crowe identified $3,114,808 in total questioned costs, consisting entirely of unsupported costs. Crowe did not identify any ineligible costs. Crowe obtained and reviewed prior audit reports, reviews, and evaluations pertinent to Janus’s financial performance under the delivery order. In a 2015 Defense Contract Audit Agency memorandum (Post Award Accounting System Audit, Sterling Operations Incorporated, Lenoir City, Tennessee, audit no. 1211-2014B17741001, dated January 6, 2015), Crowe identified two audit findings that could have had direct and material effect on the Special Purpose Financial Statement (SPFS) or other financial information significant to the audit objectives. Crowe concluded that Janus took adequate corrective action to address the first finding of inadequate contractor practices for reconciling billed to booked costs, but determined that Janus did not take corrective action on the second finding of inadequate contractor practices for billing and monitoring indirect costs and rates. Crowe issued a qualified opinion on Janus’s SPFS because Janus did not provide adequate documentation to support the reasonableness of costs

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incurred and erroneously submitted indirect cost adjustments to the U.S. government. As a result, the total questioned cost amount is considered to be material to the SPFS. Based on the results of the audit, SIGAR recommended that the responsible contracting officer at the U.S. Army Engineering and Support Center: 1. Determine the allowability of and recover, as appropriate, $3,114,808 in questioned costs identified in the report. 2. Advise Janus to address the report’s three internal-control findings. 3. Advise Janus to address the report’s three noncompliance findings.

Financial Audit 17-33-FA: USAID’s Financial Access for Investing in the Development of Afghanistan Project Audit of Costs Incurred by Chemonics International Inc. On February 3, 2011, USAID awarded an 18-month, $151,495,093 cost- plus-fixed-fee contract to Chemonics International Inc. (Chemonics) to support the agency’s Financial Access for Investing in the Development of Afghanistan (FAIDA) project. The project sought to help build a sustainable, diverse, and inclusive financial sector in Afghanistan to meet the needs of micro, small, and medium enterprises. According to the contract, Chemonics was required to engage in various activities, such as developing a strategy for lenders to reach underserved markets and partnering with Afghan governmental institutions to create conditions to increase institutional financial self-sufficiency. After 23 modifications, total funding for the contract was reduced to $113,981,225, and the period of performance was extended until February 5, 2017. SIGAR’s financial audit, performed by Mayer Hoffman McCann (MHM), reviewed $17,464,341 in expenditures that Chemonics charged to the contract from January 1, 2015, through August 31, 2016. MHM did not identify any deficiencies in Chemonics’ internal controls but did identify one instance of noncompliance with the terms and conditions of applicable regulations. MHM found that during Chemonics’ transition to using a new database, the company did not consistently perform checks to ensure, at the time of purchase, that the vendors it used were eligible to participate in U.S. government-funded activities. Upon further review, MHM determined that none of the vendors Chemonics used were excluded from receiving federal funds. MHM did not identify any questioned costs, which would have consisted of unsupported costs or ineligible costs. MHM identified 61 findings and recommendations from nine prior engagements pertinent to Chemonics’ performance under the contract. MHM determined that Chemonics had taken adequate corrective action on 56 of the prior findings and recommendations. The five findings for which adequate corrective action was not taken relate to Chemonics not checking that vendors were eligible to receive federal funds when making purchases from them. MHM issued an unmodified opinion on Chemonics’ SPFS, noting

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that it presents fairly, in all material respects, revenues received, costs incurred, and the balance for the indicated period audited. Based on the results of the audit, SIGAR recommended that the responsible contracting officer at USAID advise Chemonics to address the report’s one noncompliance finding.

Financial Audit 17-35-FA: USAID’s Kandahar Food Zone Program Audit of Costs Incurred by International Relief and Development Inc. On July 31, 2013, USAID awarded a $19,695,804 cooperative agreement to International Relief and Development Inc. (IRD) to support the Kandahar Food Zone Program. The program was designed to help rural farmers in Kandahar Province earn legitimate income by identifying and addressing the root causes and sources of instability that lead to opium poppy cultivation. After 15 modifications, the cost of the cooperative agreement increased to $45,402,467, and the period of performance was extended by over 3 years from July 31, 2015, to August 30, 2018. SIGAR’s financial audit, performed by MHM, reviewed $20,402,910 in expenditures charged to the cooperative agreement from January 1, 2015, through September 30, 2016. In contracting with an independent audit firm and drawing from the results of the audit, SIGAR is required by auditing standards to review the audit work performed. Accordingly, SIGAR oversaw the audit and

An Afghan farmer participates in USAID’s Kandahar Food Zone Program. (USAID photo)

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reviewed its results. Our review disclosed no instances where MHM did not comply, in all material respects, with U.S. generally accepted government auditing standards. MHM did not identify any material weaknesses or significant deficiencies in IRD’s internal controls, or any instances of noncompliance with the terms and conditions of IRD’s cooperative agreement. Accordingly, MHM did not identify any questioned costs, which could have consisted of unsupported costs—costs not supported with adequate documentation or that did not have required prior approval—and ineligible costs—costs prohibited by the cooperative agreement, applicable laws, or regulations. MHM identified 11 findings and recommendations from two prior engagements that were pertinent to IRD’s performance under the agreement, and determined that IRD had taken adequate corrective action on all 11. MHM issued an unmodified opinion on IRD’s Special Purpose Financial Statement, noting that it presents fairly, in all material respects, revenues received, costs incurred, and the balance for the period audited. MHM reported no findings related to the Kandahar Food Zone Program. Therefore, SIGAR made no recommendations to USAID.

Financial Audit 17-38-FA: USAID’s Results Tracking Phase II (SUPPORT II) Program Audit of Costs Incurred by Checchi and Company Consulting Inc. On July 5, 2012, USAID awarded a $52,160,960 contract to Checchi and Company Consulting Inc. (CCCI) to support the Results Tracking Phase II (SUPPORT II) program. The program’s objectives were to support and strengthen the USAID Mission for Afghanistan’s monitoring and evaluation systems, strategic communications and public information products, performance management, and to provide support services, such as facilitating workshops, conferences, and meetings for USAID and its implementing partners. After 15 modifications, the period of performance was extended over three years from April 30, 2014, to July 4, 2017. The total cost did not change. SIGAR’s financial audit, performed by MHM, reviewed $16,215,486 in expenditures charged to the contract from July 1, 2014, through June 30, 2016. MHM identified five internal control findings, consisting of one material weakness, one significant deficiency, and three deficiencies. In addition, the auditors identified two instances of noncompliance with the terms and conditions of the contract. These matters combined resulted in five findings. Most notably, MHM found that CCCI did not maintain adequate documentation to support its selection and hiring of consultants. Therefore, MHM could not determine whether the amount paid for the consultants was reasonable and awarded on a competitive basis.

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As a result of these internal control weaknesses and instances of noncompliance, MHM identified $4,174,726 in total questioned costs, consisting of $4,174,695 in unsupported costs and $31 of ineligible costs. MHM reviewed prior audit reports and identified nine findings that were material to this audit. The auditors determined that eight of the findings had been corrected. CCCI had not taken adequate action to address one finding regarding lack of documentation to support competitive procurements. MHM issued a qualified opinion on the fair presentation of CCCI’s SPFS because the almost $4.2 million in questioned costs were considered to be material. Based on the results of the audit, SIGAR recommended that the responsible contracting officer at USAID: 1. Determine the allowability of and recover, as appropriate, $4,174,726 in questioned costs identified in the report. 2. Advise CCCI to address the report’s five internal-control findings. 3. Advise CCCI to address the report’s two noncompliance findings.

Financial Audit 17-39-FA: USAID’s Commercial Horticulture and Agriculture Marketing Program Audit of Costs Incurred by Roots of Peace On February 1, 2010, USAID awarded a $30.4 million, four-year cooperative agreement to Roots of Peace to implement the Commercial Horticulture and Agriculture Marketing Program (CHAMP). The program’s initial goal was to stimulate growth in Afghanistan’s agricultural sector, create jobs, improve livelihoods, and boost the economy by establishing orchards and upgrading vineyards with trellising. The program was later expanded to include commercialization of high value crops through marketing and Workers inspect and pack pomegranates post-harvest processing. After 17 modifications, the agreement’s value for export as part of a USAID program increased to $61.3 million, and the period of performance was extended to implemented by Roots of Peace. (Roots of Peace photo) December 31, 2019. SIGAR’s financial audit, performed by MHM, reviewed $5,015,108 charged to the cooperative agreement from January 1 through December 31, 2015. MHM identified three significant deficiencies in Roots of Peace’s internal controls and two instances of noncompliance with the terms and conditions of the CHAMP cooperative agreement. First, MHM found that Roots of Peace misapplied costs incurred for other programs to CHAMP and recorded indirect costs as direct costs. Second, Roots of Peace incorrectly calculated an employee’s danger pay, resulting in a salary overpayment. Last, MHM found that Roots of Peace did not report some 2013 and 2014 cash advances to USAID for reimbursement until 2015. As a result of these internal control deficiencies and instances of noncompliance, MHM identified $12,005 in total questioned costs, consisting entirely of ineligible cost. MHM did not identify any unsupported costs.

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MHM reviewed prior audit reports applicable to CHAMP and identified seven findings and recommendations that could have a direct and material effect on the SPFS. Based on its review, MHM determined that Roots of Peace has taken adequate corrective action on six of the seven prior findings and recommendations. MHM’s audit repeats a prior finding relating to costs Roots of Peace charged that are not related to the program. MHM issued an unmodified opinion on Roots of Peace’s SPFS, noting that it presents fairly, in all material respects, revenues received, costs incurred, and the balance for the period audited. Based on the results of the audit, SIGAR recommended that the responsible agreement officer at USAID: 1. Determine the allowability of and recover, as appropriate, $12,005 in total questioned costs identified in the report. 2. Advise Roots of Peace to address the report’s three internal-control findings. 3. Advise Roots of Peace to address the report’s two noncompliance findings.

INSPECTIONS Inspection Reports Published This quarter, SIGAR published two inspection reports that examined the Baghlan Prison and the women’s dormitories at Balkh University. COMPLETED INSPECTION REPORTS • Inspection Report 17-36-IP: Baghlan Inspection Report 17-36-IP: Baghlan Prison Prison After More Than Three Years, Structurally Damaged Buildings Have Not Been Repaired, • Inspection Report 17-41-IP: Balkh and New Construction Deficiencies Have Been Identified University Women’s Dormitories On September 28, 2010, the Department of State’s (State) Bureau of International Narcotics and Law Enforcement Affairs (INL) awarded an $8.8 million contract to Omran Holding Group (OHG), an Afghan firm, to build a 495-inmate prison in Baghlan Province. State later modified the contract, increasing its cost to $11.3 million. OHG completed construction on November 8, 2012. In May 2014, SIGAR reported on its first inspection of the Baghlan prison. In that report, SIGAR identified serious structural damage to three prison buildings and made four recommendations to State, two of which were directed at addressing the construction deficiencies. One recommendation was to ensure that any rebuilding at the prison comply with International Building Code and American Concrete Institute requirements regarding the use of steel-reinforced masonry walls. The other was to determine the structural adequacy of the buildings constructed under the contract and take action to repair or replace those found structurally inadequate. Based on the structural damage to several prison buildings, and SIGAR’s concerns

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The crumbling interior of Building 17, later demolished, at Baghlan Prison. (Bureau of International Narcotics and Law Enforcement Affairs photo) that the prison was not constructed properly to withstand earthquakes and that the Afghan government lacks the capacity to maintain the prison, SIGAR initiated a follow-up inspection in August 2015. The objectives were to assess whether: (1) the prison’s structurally damaged buildings have been repaired or rebuilt, and (2) the issues previously raised about whether the prison is structurally adequate to withstand earthquakes and whether the prison’s maintenance issues have been addressed. Although OHG informed State about the structural damage to Baghlan prison buildings more than three years ago, SIGAR found that the damaged buildings have not been repaired or rebuilt. No action has been taken because State’s contracting officer has not issued a final decision regarding whether OHG is liable for repairing or, if needed, rebuilding the damaged structures. There are two primary reasons for State’s delay: (1) INL appar- ently lacks the expertise necessary to respond to OHG’s criticism of an independent report concluding that OHG is responsible for the damage of three prison buildings, and (2) State’s Office of Inspector General (OIG) asked INL to delay a final decision until after the conclusion of an ongoing investigation of a possible civil false claim against State and OHG employees in connection with the Baghlan prison’s construction. INL contracted with Hask Engineering Services (Hask), an Afghan firm, to conduct a geotechnical and materials study of the prison’s soil conditions and the materials that OHG used in its construction. Hask issued its report in July 2014 and noted that OHG did not identify the soil’s potential to collapse, did not install a water drainage system, and used plumbing materials that INL rejected. OHG’s negligence resulted in liquid infiltrating the subsoil,

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which created soil instability, which then damaged three prison buildings, eventually causing one to collapse. The study also noted that concrete tests and photos demonstrate that OHG did not construct support columns in accordance with contract specifications. Hask concluded that these construction deficiencies reduced the ability of the buildings to withstand the soil settlement. OHG disagreed with Hask’s findings. In a February 2015 letter to the contracting officer, OHG stated that its work was done properly and did not cause the problems identified, and provided a paragraph-by-paragraph rebuttal to Hask’s study. OHG stated that Hask made noticeable errors in its measurements, calculations, and analyses, which undermined the study’s validity and findings. OHG also questioned Hask’s competency to conduct such a complex review and stated that it had asked INL to hire an independent, international geotechnical firm and inspectors to avoid the risk of hiring an Afghan firm with limited technical capacity and competency. In May and October 2015, the State OIG asked the contracting officer not to issue a final decision regarding the damaged buildings that would absolve OHG or bind State, pending the outcome of the joint SIGAR and State OIG investigation. The contracting officer stated her ability to issue a final decision is further restrained due to INL’s failure to respond to OHG’s rebuttal to the Hask study. As recently as August 2016, the contracting officer’s representative (COR) and OHG told SIGAR that they were waiting for State’s guidance on how to proceed. Although OHG maintained that it was not responsible for any structural damage, it agreed to correct five items during the contract’s warranty period. The COR told us OHG successfully installed a storm-water management system, replaced waste-collection plumbing lines with approved lines, replaced electrical junction boxes in inmate living areas, and refinished bathroom walls that had cracking or loose finishes. The COR added that he is unsure whether OHG ever completed the fifth item: the submission of a corrective action plan to correct deficiencies associated with control and isolation joints. During its November 2015 site visit, SIGAR identified 10 construction deficiencies that INL did not identify before it transferred the prison to the Afghan government. At least five of those deficiencies have safety implications: 1. lack of lightning-protection systems on building roofs 2. lack of door closers and panic bars throughout the prison facility 3. lack of fire extinguishers, smoke and heat detectors, and fire alarms in several buildings 4. lack of electrical grounding pits and 5. the installation of single-glazed glass instead of double-glazed glass in the guard towers

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Although the warranty period expired in November 2013, INL officials told SIGAR they are concerned about these newly found deficiencies and are exploring options for correcting them. In June 2016 and again in December 2016, State officials informed SIGAR that no work has been done at the prison since the November 2015 site visit. Despite the structural damage to prison buildings, the facility is being used. However, SIGAR has several safety concerns. For example, SIGAR’s May 2014 report noted that at least one of the detention center’s concrete support columns was not constructed properly to withstand an earthquake. The November 2015 site visit confirmed that improperly constructed concrete support columns is still a concern. During the site visit, SIGAR identified an additional structural concern pertaining to a lack of isolation joints and connectors between masonry infill walls and structural columns and beams, which help prevent damage during an earthquake. In addition, INL estimated that the prison has the capacity to reasonably accommodate fewer than 350 inmates in its current damaged state. Yet, INL officials said that as of April 2016, the prison housed 371 inmates. Although this number was close to what INL stated was acceptable for the prison in its current state, SIGAR found some cells that were designed to hold eight inmates were holding 15. SIGAR also found that the Baghlan prison continues to have maintenance problems. First, the diesel generators that were not functioning during SIGAR’s initial inspection were still not functioning as of December 2016. As a result, the prison continues to rely on a generator purchased with International Red Cross assistance. Second, the leach field, designed to absorb septic-system runoff, that was clogged and not functioning during SIGAR’s initial inspection was still not functioning. Third, SIGAR found that the sink and shower drainage system was backed up and not functioning. INL and OHG said Afghan authorities were not devoting sufficient attention to operating and maintaining the prison. SIGAR made four recommendations. To improve security and prisoner safety, and to ensure that the U.S. government receives the highest value for the money spent on the Baghlan prison, SIGAR recommended that the Secretary of State direct the Regional Procurement Support Office (RPSO) in Frankfurt, Germany, to, within 90 days from the issuance of the report: (1) resolve the issue of responsibility and make a final determination for repairing or rebuilding the damaged buildings, and determine whether further analysis is required to establish the full extent of construction deficiencies; and (2) in coordination with INL, use all reasonable means available to require OHG to correct, at minimum, the construction deficiencies identified in this report that have safety implications associated with them, specifically the installation of (a) lightning-protection systems on all building roofs; (b) door closers and panic bars where appropriate; (c) fire extinguishers, smoke and heat detectors, and fire alarms that were missing

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in several buildings; (d) electrical grounding pits; and (e) double-glazed glass in the guard towers. SIGAR also recommended that the Assistant Secretary of INL, within 90 days from the issuance of this report: (3) prepare or commission a study of the concrete support column and infill wall-construction deficiencies to determine the extent of those problems and submit the results to the contracting officer to consider when making the final decision on whether to take any action against OHG; and (4) immediately work with the Afghan government and prison authorities to determine what steps to take to repair the nonfunctioning diesel generators, the backed-up sewer system, and the nonfunctioning sink and shower drainage system, and assist the Afghans in acquiring adequate long-term O&M services for the prison.

Inspection Report 17-41-IP: Balkh University Women’s Dormitories Completion is at Least Two Years Behind Schedule, and Construction and Design Deficiencies Should be Addressed On September 23, 2013, the Department of State’s RPSO awarded a $7.75 million firm-fixed-price contract—number SGE500-13-C-0055—to Abdulhai Gardezi Construction Firm (ACF), an Afghan firm, to construct women’s dormitories at Balkh University in Mazar-e Sharif, Balkh Province. The U.S. Embassy in Kabul’s Public Affairs Section (PAS) funded the contract. The contract required ACF to construct two four-story women’s dormitories to house up to 800 female students, with a cafeteria between them to serve both dormitories. In each dormitory, ACF was to construct 40 bathrooms and showers; one gym and fitness room; two 50-person computer laboratories; one laundry room; four 30-person classrooms; one common room; and a private suite with a bedroom, bathroom, office, and conference room for a dorm mother. In addition, the contract required ACF to build a barrier and a security wall around the two dormitories. The Afghan Ministry of Higher Education (MOHE) provided the design drawings used for the women’s dormitories and supporting facilities. BCL Associates Ltd., located in Dhaka, Bangladesh, in association with Hi-Tech International Engineering, an Afghan engineering firm, developed the designs on the MOHE’s behalf. On January 5, 2014, over three months after the award, ACF received the Notice to Proceed and was required to complete the dormitories by February 9, 2015. Since the contract was awarded in September 2013, it has been modified seven times, which increased the contract cost to $8.23 million and extended the project completion date to March 28, 2016. The contract provides for a one-year warranty period to begin when ACF transfers the dormitories to PAS. RPSO designated a PAS official as the contracting officer’s representative for the dormitory construction project. Due to security concerns, PAS officials told us they were unable to monitor the construction firsthand. Instead, they are working with a

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third-party Afghan monitoring and evaluation entity, Sustainability Energy Environment, that has engineering staff on-site to monitor construction. On August 25, 2015, PAS entered into a $1.07 million cooperative agreement—number SAF20015CA011—with Binazeer Construction Company, an Afghan firm, to provide operation and maintenance (O&M) for the women’s dormitories being built at Herat and Balkh Universities. The Balkh University women’s dormitories were allocated more than half of the total, or about $573,600, for O&M. The agreement requires Binazeer Construction Company to procure labor, materials, and equipment to support O&M for 18 months once the dormitories’ construction is complete. On September 11, 2016, PAS awarded a $500,000 contract to Barikab Durani Logistic Services to procure, deliver, and install the required furnishings and equipment for the two women’s dormitories at Balkh University. The objective for this inspection was to determine the extent to which the dormitories were completed in accordance with contract requirements and applicable construction standards. A SIGAR inspection determined that the SIGAR found that the dormitories had not been completed by their initial State-funded Balkh University women’s March 28, 2016, scheduled completion date, and the project had experi- dormitories are at least two years behind enced delays throughout the construction performance period. This was schedule and have construction deficiencies. mainly because of ACF’s slow progress and delays caused by the RPSO (SIGAR photo) contracting officer granting extensions, through contract modifications, for design changes and delays due to weather conditions. Regarding the slow construction progress, ACF progress reports showed that construction progressed only about 3% from December 2015 to August 2016. In addition, Sayed Majidi Architecture and Design’s September 2015 monitoring and evaluation report raised concerns that little to no progress on the construction had been made, noting the percentage of completed construction and the percentage of the contract cost that ACF reported being paid. As of December 2016, ACF had billed for about $7.6 million, or 93%, of the $8.23 million modified contract amount, and State had paid ACF $6.6 million of the $7.6 million billed, or almost 80% of the modified contract amount, withholding the rest as retainage. However, PAS’s monitoring and evaluation contractor reported that only 67% of construction was completed as of September 2016. In January 2017, PAS officials told SIGAR that the new scheduled completion date for the women’s dormitories is June 2017. However, SIGAR found that RPSO had not modified the contract to reflect this new date or assessed any liquidated damages for ACF’s failure to complete the dormitories on time. As of January 2017, the request for equitable adjustment had not been approved and no further progress payments have been made since December 2015. Furthermore, ACF and PAS told SIGAR that no plans had been made to connect the dormitories and their supporting facilities to Mazar-e Sharif’s electrical power grid, and it was not clear who would fund this effort. A

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Balkh University official noted that the university requested that the MOHE make arrangements for the dormitories to be connected to the grid, which would require infrastructure improvements, such as installing power poles, distribution cables, and transformers. During its January 2017 site visit, SIGAR found that the dormitories were still incomplete and had not been connected to the local power grid, and all construction activity had stopped. Because the dormitories are incomplete, they are not being used. According to a university official, as a result, approximately 450 female students have been living off-campus in rented housing paid for by Balkh University, while another 400 to 450 female students have been given sti- pends to find their own housing near the university. If the dormitories were complete, the university would be able to house 800 of those approximately 900 female students on-campus, which would save the university approximately $16,000 a month. SIGAR also found four construction deficiencies resulting from ACF’s failure to adhere to contract requirements, and two design deficiencies. Specifically, SIGAR found that ACF constructed seismic building separations improperly, did not install floor drains in the boiler room, did not properly finish some interior walls; and constructed stair risers improperly. In addition, the bathroom windows and ceilings were poorly designed, and the stairway landings were designed incorrectly. Five out of these six construction and design deficiencies were found to have health or safety implications. SIGAR made three recommendations. To protect the U.S. taxpayers’ investment in the Balkh University women’s dormitories and to ensure that the dormitories are completed and all deficiencies addressed so that female students can move into them, SIGAR recommended that the Secretary of State direct RPSO in Frankfurt, Germany, to, in coordination with PAS: (1) direct ACF to correct the identified construction deficiencies to (a) create seismic building separations as required by the design drawings and in accordance with general engineering best practices, (b) add floor drains to the boiler room, (c) repair cracked walls and peeling paint, and eliminating mold, then, repainting the walls, and (d) repair stair risers in the cafeteria according to design specifications; (2) work with the MOHE to redesign the bathroom windows and ceilings, and stairway landing areas to meet the required building codes, and once these design changes have been made, direct ACF to make the changes; and (3) coordinate with the MOHE to determine and provide for the most effective method to fund and connect the women’s dormitories and supporting facilities to the Mazar-e Sharif power grid to provide electricity to the facilities.

Status of SIGAR Recommendations The Inspector General Act of 1978, as amended, requires SIGAR to report on the status of its recommendations. This quarter, SIGAR closed six recommendations contained in four audit and inspection reports. These

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recommendations resulted in the recovery of $65,565 in ineligible or unsupported contract costs paid by the U.S. government. From 2009 through March 2017, SIGAR published 244 audits, alert letters, and inspection reports and made 733 recommendations to recover funds, improve agency oversight, and increase program effectiveness. SIGAR has closed over 81% of these recommendations. Closing a recommendation generally indicates SIGAR’s assessment that the audited agency has either implemented the recommendation or otherwise appropriately addressed the issue. In some cases, a closed recommendation will be the subject of follow-up audit work. The Inspector General Act of 1978, as amended, also requires SIGAR to report on any significant recommendations from prior reports on which corrective action has not been completed. This quarter, SIGAR continued to monitor agency actions on 52 recommendations. There were no recommendations more than 12 months old for which an agency had yet to produce a corrective-action plan that SIGAR believes would resolve the identified problem or otherwise respond to the recommendations. However, there are 33 recommendations more than 12 months old for which SIGAR is waiting for the respective agencies to complete their agreed-upon corrective actions.

SPECIAL PROJECTS SIGAR’s Office of Special Projects was created to examine emerging issues and deliver prompt, actionable reports to federal agencies and the COMPLETED SPECIAL PROJECTS Congress. The team conducts a variety of assessments, producing reports • Special Project Review 17-26-SP: Good Performers Initiative on all facets of Afghanistan reconstruction. The directorate is made up of • Special Project Review 17-32-SP: auditors, analysts, investigators, lawyers, subject-matter experts, and other Schools in Balkh Province specialists who can quickly and jointly apply their expertise to emerging • Special Project Review 17-34-SP: problems and questions. USAID Supported Health Facilities in Ghazni Province This quarter, SIGAR’s Office of Special Projects wrote seven products, • Special Project Review 17-37-SP: Good including reviews and inquiry letters, examining a range of issues including: Performers Initiative observations on 30 USAID-supported health facilities in Ghazni Province; • Special Project Inquiry Letter 17-28-SP: the condition of 26 schools in Balkh Province; 13 completed infrastructure DOD Infrastructure Projects • Special Project Inquiry Letter 17-29-SP: projects in Ghazni and Khowst Provinces that the Bureau of International State Infrastructure Projects Narcotics and Law Enforcement Affairs (INL) funded through the Good • Special Project Inquiry Letter 17-30-SP: Performers Initiative; and, ongoing and planned infrastructure being built USAID Infrastructure Projects by DOD, State, and USAID.

Review 17-26-SP: Good Performers Initiative Status of Six Completed Projects in Ghazni Province, Afghanistan This review discusses the results of site inspections conducted by SIGAR at six INL-funded Good Performers Initiative (GPI) infrastructure projects in Ghazni Province. These six projects were completed at a cost to the

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U.S. taxpayer of about $3.1 million. SIGAR conducted these inspections as part of its ongoing effort to verify the location and operating conditions of facilities built, refurbished, or funded by the United States as part of the reconstruction effort in Afghanistan. SIGAR found that INL’s reported geospatial coordinates for two of the six infrastructure projects were more than 40 kilometers from the actual project location. SIGAR also found that one of the projects, for which INL paid nearly $1 million, stood abandoned, and three had deficiencies that were affecting usability, including a lack of electricity and water, and leaky roofs. At another site, SIGAR found that contractual requirements for the installation of water and sewer components may not have been met by the contractor used by the Afghan Ministry of Counter Narcotics. SIGAR provided a draft of this review to the State Department for comment on January 3, 2017. The Department of State provided comments on January 19, 2017. In its comments on a draft of this report, the Department Interior of agricultural building completed, of State thanked SIGAR for its thorough examination of the six projects and but abandoned, in Ghazni Province. for raising the issues contained in the review. State also provided technical (SIGAR photo) comments, which were incorporated, as appropriate. SIGAR conducted this special project in Washington, DC, and Kabul, Afghanistan, from December 2015 to June 2016 in accordance with SIGAR’s quality-control standards.

Review 17-32-SP: Schools in Balkh Province Observations from Site Visits at 26 Schools This review is the second in a series that will discuss findings from site visits to schools across Afghanistan. The 26 schools discussed in this report were either built or rehabilitated using taxpayer funds provided by USAID. As of September 30, 2016, USAID has disbursed about $868 million for education programs in Afghanistan. The purpose of this special project review was to determine the extent to which schools purportedly constructed or rehabilitated in Balkh Province using USAID funds were open and operational, and to assess their current condition. SIGAR was able to assess the general usability and potential structural, operational, and maintenance issues for each of the 26 schools. Observations from these site visits indicated that there may be problems with student and teacher absenteeism at several of the schools visited in Balkh that warrant further investigation by the Afghan government. SIGAR also observed that several schools visited in Balkh lack basic services, including electricity and clean water, and have structural deficiencies that affect delivery of education. SIGAR provided a draft of this report to USAID for comment on February 23, 2017. USAID provided comments on March 22, 2017. In its comments, USAID pointed out “that of the 26 schools visited by SIGAR, Structural damage on the interior wall of a two were constructed and 24 were rehabilitated by USAID. Of the 24 school in Balkh Province. (SIGAR photo)

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rehabilitated schools, 11 were non-structural renovations.” USAID also stated that it is no longer building new schools in Afghanistan and that it transferred these 26 schools to the Afghan Ministry of Education (MOE). USAID acknowledged that it “continues working with the Afghan government to build a comprehensive, nationwide education system by training teachers, expanding community-based education, supporting institutions of higher learning, and strengthening the ability of the MOE to deliver high-quality education throughout Afghanistan.” Additionally, USAID stated that it “will ensure that the MOE is notified of the data issues identified by SIGAR for further analysis, and follow-up as well on other issues raised in the SIGAR review report. SIGAR conducted its work in Balkh and Kabul Provinces, Afghanistan, and in Washington, DC, from October 2015 through February 2017, in accordance with SIGAR’s quality-control standards.

Review 17-34-SP: USAID-Supported Health Facilities in Ghazni Province Observations from Site Visits to 30 Locations This review discusses the results of site inspections to verify the locations and operating conditions at 30 USAID-supported public health facilities in Ghazni Province. SIGAR found substantial inaccuracies in the geospatial coordinates USAID provided for many of these 30 health facilities, including 15 facilities that were at least 10 kilometers away from coordinates USAID provided, and observed that not all facilities visited had access to electricity and running water. This is the fifth in a series of health facility reviews SIGAR has conducted in provinces throughout Afghanistan. The facilities reviewed are supported by USAID through the World Bank- administered Afghanistan Reconstruction Trust Fund (ARTF). Previously, the Ministry of Public Health received funds through direct bilateral assistance from USAID to fund operations at these health facilities. SIGAR provided a draft of this review to USAID for comment on March 9, 2017. USAID provided comments on March 20, 2017. In its com- Leaking roof and saturated walls at ments, USAID stated that it welcomed feedback on the 30 health facilities a health facility in Ghazni Province. visited and that all were open, operational, and benefiting the community (SIGAR photo) and observed that this information is consistent with monitoring information USAID receives from the World Bank. USAID also stated that, “While global positioning system (GPS) coordinates are a useful tool for locating sites, they are not regularly used in the health sector to locate facilities in Afghanistan. Alternative means by which clinics can be located are available.” However, USAID added, “At the same time, USAID/Afghanistan appreciates the utility offered by strong geospatial datasets and has issued guidance for the Mission to project managers and implementing partners to standardize the collection of geospatial data where possible.”

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DIRECTOR OF SPECIAL PROJECTS MEETS WITH AFGHAN MINISTER OF PUBLIC HEALTH TO SET UP INFORMATION- SHARING ARRANGEMENTS

On April 3, 2017, SIGAR’s Director of Special Projects, Matthew Dove, met with the Afghan Minister of Public Health, Dr. Ferozudin Feroz, to brief the minister on SIGAR’s completed and ongoing work to assess the operational condition of health facilities supported by USAID through the MOPH. The meeting was a follow-up to a February 4, 2017, meeting between IG Sopko and Minister Feroz where they agreed to set up an information-sharing arrangement dealing with future SIGAR site inspections. Dove and Minister Feroz were joined in their meet- Dove and Minister Feroz agree to close collaboration as SIGAR continues site inspections of U.S. government-supported health ing by SIGAR’s Assistant Inspector General for Forward facilities. (SIGAR photo by Thomas Niblock) Operations, Thomas Niblock, SIGAR’s Afghan civil society partners, and several members of the minister’s senior staff. Dove presented the findings of SIGAR’s site inspections of 179 facilities in six provinces (Herat, Kabul, Badakhshan, Baghlan, Ghazni, and Takhar), which found that each of the facilities was open and operational but that 37% were at least 10 kilometers from the coordinates provided by USAID, 22% did not have running water, and 15% did not have reliable electricity. Dove also confirmed the offer for SIGAR IG Sopko to regularly share information and findings for all future Dove briefs Minister Feroz and his senior staff on the importance inspections of MOPH facilities. The minister thanked and outcomes of SIGAR’s work in the health sector. (Afghan civil SIGAR for its work to help the ministry ensure that the society photo) Afghan people receive access to needed health care services and committed to working closely alongside SIGAR as it continues to conduct similar inspections in additional provinces.

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SIGAR conducted this special project in Washington, DC; Ghazni, Afghanistan; and Kabul, Afghanistan, from April 2016 through January 2017 in accordance with SIGAR’s quality-control standards.

Review 17-37-SP: Good Performers Initiative Status of Seven Completed Projects in Khowst Province, Afghanistan SIGAR conducted site inspections at seven INL funded Good Performers Initiative (GPI) infrastructure projects in Khowst Province. These seven projects were completed at a cost of about $2.7 million. SIGAR conducted these inspections as part of its ongoing effort to verify the location and operating conditions of facilities built, refurbished, or funded by the U.S. as part of the reconstruction effort in Afghanistan. SIGAR found that INL’s reported geospatial coordinates for the seven infrastructure projects were no more than three kilometers from the actual project location. However, several of the projects had deficiencies that were affecting usability, including a lack of electricity and water, and leaky roofs. SIGAR provided a draft of this review to INL for comment on March 27, 2017. INL provided comments April 14, 2017. In its comments on a draft of this report, INL stated that GPI projects are nominated by a Provincial Vertical crack in the facade of Bakhtnoor Development Council and approved by a Provincial Governor, based on exist- Bakhtiar School, Khowst Province. ing Provincial Development Plans, and ultimately “cleared by the relevant (SIGAR photo) national ministry responsible for the long-term maintenance and operation of the project before receiving final approval.” INL also highlighted that the Afghan government is responsible for operating and maintaining projects following completion and any warranty period for which the contractor may be responsible. Finally, INL requested that we remove a statement in the report “regarding ‘ghost’ students, teachers, and schools.” However, our report clearly states that “While a single site visit, during one of two shifts at a school, cannot substantiate claims of ghost teachers, ghost students, or ghost schools, it does provide valuable insight into the operations of a school on a normal school day. Our observations from this visit to Azady Mina School indicate that there may be problems with student absenteeism that warrant further investigation by the Afghan government.” We continue to maintain that the issues with absenteeism we observed at the school warrant further investigation from the Afghan government. SIGAR conducted this special project in Washington, DC, and in Khowst and Kabul, Afghanistan, from December 2015 to June 2016 in accordance with SIGAR’s quality control standards.

Inquiry Letter 17-28-SP: DOD Infrastructure Projects On February 14, 2017, SIGAR sent an inquiry letter to Theresa Whelan, who is performing the duties of Under Secretary of Defense for Policy, to request information regarding DOD’s ongoing and planned infrastructure development projects in Afghanistan.

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Infrastructure projects have been and continue to be a significant part of the Afghanistan reconstruction effort, and the Afghanistan National Peace and Development Framework for 2017–2021 calls on international donors to support the Afghan government’s efforts to improve the economic environment by focusing on infrastructure development, among other things, over the next five years. In addition to understanding how DOD is responding to the Afghan government’s call for infrastructure development, information about DOD’s ongoing and planned infrastructure development projects in Afghanistan will help the new U.S. Congress and Administration understand existing reconstruction priorities and allow SIGAR to bolster its planning efforts. Since its creation, SIGAR has conducted extensive oversight of infrastructure projects in Afghanistan funded by the U.S., and its efforts have resulted in hundreds of millions of dollars in cost savings. For example, as a result of SIGAR’s September 2013 audit examining ongoing and planned construction in support of the Afghan National Defense and Security Forces, the Department of Defense took actions to more closely align infrastructure development with projected needs. DOD’s actions in response to SIGAR’s work resulted in approximately $600 million worth of U.S. taxpayer funds being put to better use. SIGAR requested that no later than March 1, 2017, DOD provide a list of all ongoing and planned DOD-funded infrastructure development projects in Afghanistan. On March 21, 2017, DOD provided its response to SIGAR’s February 14, 2017, letter. DOD’s response showed that it had 62 ongoing infrastructure projects with a total value of approximately $1 billion, and 361 planned infrastructure projects with a projected value of approximately $338 million.

Inquiry Letter 17-29-SP: State Infrastructure Projects On February 14, 2017, SIGAR sent an inquiry letter to the Special Chargé d’Affaires Hugo Llorens at the U.S. Embassy, Afghanistan, to request information regarding State’s ongoing and planned infrastructure development projects in Afghanistan. SIGAR requested that no later than March 1, 2017, State provide a list of all ongoing and planned State-funded infrastructure development projects in Afghanistan. On March 21, 2017, State provided its response to SIGAR’s February 14, 2017, letter. State’s response showed that it had 61 ongoing infrastructure projects in Afghanistan, and one planned infrastructure project. Due to differences in the reporting methods used by State, SIGAR was unable to provide an aggregate cost for these projects.

Inquiry Letter 17-30-SP: USAID Infrastructure Projects On February 14, 2017, SIGAR sent an inquiry letter to Acting Administrator of USAID Wade Warren to request information regarding USAID’s ongoing and planned infrastructure development projects in Afghanistan.

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On March 12, 2017, USAID provided its response to SIGAR’s February 14, 2017, letter. USAID’s response showed that it had 12 ongoing infrastructure projects in Afghanistan valued at approximately $446 million; two ongoing agricultural programs with construction components worth about $16 million; and, 15 planned infrastructure projects with a projected value of approximately $505 million.

LESSONS LEARNED SIGAR’s Lessons Learned Program was created to identify and preserve lessons from the U.S. reconstruction experience in Afghanistan and to make NEW LESSONS LEARNED PRODUCTS recommendations to Congress and executive agencies on ways to improve ANNOUNCED efforts in current and future operations. The program currently has six proj- • Lessons Learned 17-08-LL: Monitoring and Evaluation ects in development: interagency strategy and planning, counternarcotics, private sector development, security sector reconstruction, stabilization, and monitoring and evaluation. This quarter, the SIGAR Lessons Learned Program announced a project that will review U.S. government monitoring and evaluation efforts (M&E) in Afghanistan.

Monitoring and Evaluation Since 2001, the U.S. government has been actively engaged in Afghanistan reconstruction via diplomatic, developmental, and military means. Various agencies of the U.S. government have funded and implemented hundreds of programs, with goals ranging from building the ANDSF to improving the quality of life for all Afghans. Many of these programs have been monitored and evaluated with the goal of improving program execution, documenting results, identifying lessons and best practices, and enabling improved design and execution of follow-on programs. How these programs have been monitored and evaluated varied significantly across and within U.S. government agencies. To date, there has been no comprehensive study of what U.S. government agencies learned from those experiences, and how monitoring and evaluation might be improved for current and future reconstruction efforts. This project will identify lessons learned from the U.S. government experience with conducting M&E of Afghanistan reconstruction programs from 2001–2016. The study will identify the approaches to M&E used by various U.S. government agencies, including why these approaches were chosen and how effective they proved to be, discuss whether the results of M&E were used to improve the execution of programs during their lifetime, synthesize the lessons learned across departments and agencies, and make recommendations as to which of these lessons might be generalizable to future M&E efforts.

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INVESTIGATIONS During the reporting period, SIGAR investigations resulted in three criminal FIGURE 2.1 information charges, two convictions, one sentencing, $150,000 in restitu- SIGAR INVESTIGATIONS: NUMBER OF OPEN tions, and a civil settlement of $40 million. Additionally, SIGAR initiated 15 INVESTIGATIONS, AS OF MARCH 31, 2017 new cases and closed 14, bringing the total number of ongoing investigations to 262, as shown in Figure 2.1. To date, SIGAR investigations have resulted in a cumulative total of 145 Total: 262 criminal charges, 109 convictions, and 100 sentencings. Criminal fines, restitutions, forfeitures, civil settlement recoveries, U.S. government cost Other/ savings and recoveries total nearly $1.1 billion. Miscellaneous Procurement 68 and Contract Investigation Results in $40 Million Civil Settlement Fraud Corruption On March 6, 2017, the United States Transportation Command 101 and Bribery 50 (USTRANSCOM) at Scott Air Force Base reached an administrative global settlement with MAERSK Limited Lines (MLL), whereby MLL agreed to pay $40 million for false claims submitted to the U.S. government under the Money Laundering Theft Universal Services Contract (USC-06). 18 25 On January 27, 2015, SIGAR, the Defense Criminal Investigative Service

(DCIS), U.S. Air Force Office of Special Investigation, and the U.S. Army Source: SIGAR Investigations Directorate, 4/10/2017. Criminal Investigation Division (USACID) initiated a joint investigation after the USTRANSCOM Judge Advocate’s Office (JA) requested assistance concerning possible fraud involving a 2010 delivery of non-military subsistence cargo to Forward Operating Base (FOB) Sharana, Afghanistan. The JA identified MLL as the prime contractor for the transport of the cargo, and indicated MLL denied allegations that the cargo went undelivered. The JA also indicated that contract employees of Vectrus Systems Corporation, which managed the receipt of the cargo at FOB Sharana under a contract issued by the U.S. Army, signed the proof of delivery (POD) documents. The JA requested that SIGAR contact Vectrus to conduct interviews concerning the PODs in question and to verify the authenticity of the signa- tures on the PODs. The investigation, which required obtaining handwriting exemplars to verify the authenticity of the PODs in question, determined that the subject cargo was pilfered, stolen, missing or unaccounted for. SIGAR and its JA partners conferred with the Civil Division of the Southern District of Illinois U.S. Attorney’s office, who agreed to prosecute the matter if an administrative settlement could not be reached. Subsequently, prosecution was declined once the issue was administratively settled, ensuring the U.S. government would recoup the total amount owed by MLL.

Investigation Results in $320,000 Civil Settlement On October 28, 2016, the U.S. Attorney’s Office (USAO), Tampa, Florida, reached a civil settlement whereby People Technology and Processes LLC (PTP) agreed to pay $320,000 to settle false-billing allegations.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 49 SIGAR OVERSIGHT ACTIVITIES

On July 7, 2014, SIGAR, DCIS, and the U.S. Army Criminal Investigation Division Major Procurement Fraud Unit (CID MPFU) initiated a joint investigation based on information derived from a qui tam, or whistleblower lawsuit, filed in the Middle District of Florida in February 2013, concerning allegations of false claims submitted for payment by PTP. That suit was filed under the whistleblower provisions of the federal False Claims Act, which authorizes private parties to sue for false claims on behalf of the United States and to share in any recovery. PTP was the information technology and professional services subcontractor to the prime contractor, ManTech International Corporation, on a government contract awarded by the U.S. Army Communications-Electronics Command through the Strategic Sources Services (“S3”) Program. As a subcontractor, PTP submitted invoices for its services to the prime contractor, who then paid those invoices and in turn, billed those costs to SIGAR investigators at the firing range at the United States. Between November 2011 and June 2012, PTP submitted Bagram Airfield. (SIGAR photo) invoices for work allegedly done by PTP employees in Afghanistan under the S3 contract; however, some of that work was not actually performed. Specifically, PTP submitted invoices for one employee while he was in another country on R&R for a month, billed for another employee for several weeks after PTP terminated him, and billed one or more weeks for two other employees before they actually started working for PTP. In all, PTP improperly billed $127,990.90 for work never performed by employees. This settlement resolves the allegations in the lawsuit. The relator has received $64,000 from the proceeds of the settlement.

Former U.S. Contractor Pleads Guilty to Failing to File Tax Returns On January 12, 2017, a criminal information for Michael J. Badgett was filed in the Western District of Texas for the offense of willful failure to file a return. On January 31, 2017, Badgett pleaded guilty to three counts of failing to file federal tax returns on taxable income he earned in Afghanistan totaling over $7.3 million over three years. From January 2009 until March 2011, Badgett was the managing director of a Kabul, Afghanistan, secure housing development company that served a number of U.S. government contractors. Badgett opened a JP Morgan Chase bank account in the United States to cater specifically to U.S. clients and according to admissions made in connection with his plea, he instructed U.S. clients to pay the Chase bank account directly instead of sending money overseas. Badgett further admitted he transferred the company’s overseas bank accounts to the Chase account, which made it easier for Badgett to obtain and use these funds for his own personal purposes on a monthly basis. Badgett received taxable income of $1,616,897, $3,834,168, and $1,672,828 for tax years 2010 to 2012, respectively. Pursuant to the plea agreement, for sentencing purposes, he was also responsible for his wife’s tax liabil- ity. Accordingly, Badgett caused a loss to the United States of taxes due on approximately $7 million of income. SIGAR and IRS-CI investigated this case.

50 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES

Former U.S. Contractor Charged for Making False Statements On March 16, 2017, in the Eastern District of North Carolina, a criminal information was filed against William P. Anderson, charging one count of making false statements. The charge stemmed from an investigation which revealed that Anderson denied smuggling criminal proceeds out of Afghanistan between May 3 and May 29, 2014. He falsely claimed that money he wired back to the United States resulted from the payments of gambling debts. In addition, he falsely denied concealing some of the criminal proceeds in plasma cutters he had stolen from Afghanistan. The investigation is being jointly conducted by SIGAR, the Federal Bureau of Investigation (FBI), DCIS, and CID MPFU. A court date of April 10, 2017, is scheduled for an anticipated plea.

Federal Charges Filed Against Two Former U.S. Military Members On March 24, 2017, in the Eastern District of North Carolina, a criminal information was filed against two former U.S. Army Specialists, Kenneth Preston Blevins and Michael Banks, for one count of theft of government property. Federal agents conducted financial analysis and discovered that the spouse of Kenneth Blevins received several suspicious “structured”—divid- ing amounts into smaller portions to skirt reporting requirements—money transfers via Western Union, originating from Jalalabad, Afghanistan, totaling in excess of $17,000. Further investigation revealed that Blevins, a former supply specialist with the 3rd Special Forces Group based at Ft. Bragg, was implicated in a scheme to sell food and dry goods from the dining facility (DFAC) which he managed while deployed to Afghanistan. These goods were smuggled from the military base by Afghan workers and later sold on the black market. The financial proceeds from the scheme were split between Blevins, Banks, another military member, and the Afghan DFAC workers.

SIGAR’s Investigative Operations Receives a Compliant Rating Following CIGIE Peer Review In March 2017, a team from the Export-Import Bank of the United States (EXIM) conducted a peer review of the systems of internal safeguards and management procedures of SIGAR’s investigative operations. The review, which took place at SIGAR’s headquarters in Arlington, Virginia, was conducted in conformity with the Quality Standards for Investigations and the Quality Assessment Review Guidelines established by the Council of the Inspectors General on Integrity and Efficiency (CIGIE) and the Attorney General’s Guidelines for Office of Inspectors General with Statutory Law Enforcement Authority. The review concluded SIGAR’s safeguards and

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 51 SIGAR OVERSIGHT ACTIVITIES

procedures conform to professional standards in the planning, execution and reporting of its investigations. Additionally, the peer review team identified some notable positive attributes of SIGAR’s investigative operations. EXIM’s “Letter of Observations” included the following statement: SIGPROS & JOCs - We found that the SIGAR OI’s use of Special Department of Justice Prosecutors called “SIGPROs” to be a tremendous investigative asset. Additionally, the SIGAR has an Agent permanently assigned to the Joint Operations Center, a multi-Agency task force which informs the Federal Bureau of Investigation (FBI), along with several other Investigative agencies, of all open investigations. The rapid referral process to the FBI and other agencies coupled with dedicated prosecutors to each and every SIGAR investigations fosters a rapid and highly effective case intake and prosecutorial acceptance/declination process. Additionally, numerous cases demonstrated non-criminal remedies such as suspension and/or debarment. The vast majority of the OIG community would benefit tremendously from a similar model.

Suspensions and Debarments This quarter, SIGAR’s suspension and debarment program referred 12 individuals and 16 companies for debarment based on evidence developed as part of investigations conducted by SIGAR in Afghanistan and the United States. These referrals bring the total number of individuals and companies referred by SIGAR since 2008 to 837—encompassing 465 individuals and 372 companies to date, see Figure 2.2. As of the end of March 2017, the efforts of SIGAR to utilize suspension and debarment to address fraud, corruption, and poor performance in Afghanistan have resulted in a total of 133 suspensions and 504 finalized debarments/special entity designations of individuals and companies engaged in U.S.-funded reconstruction projects. An additional 14 individuals and companies have entered into administrative compliance agreements with the government in lieu of exclusion from contracting since the initia- tion of the program. During the second quarter of 2017, SIGAR’s referrals resulted in nine finalized debarments of individuals and entities by agency suspension and debarment officials. An additional 41 individuals and companies are currently in proposed debarment status, awaiting final adjudication of their debarment decisions. Suspensions and debarments are an important tool for ensuring that agencies award contracts only to responsible entities. SIGAR’s program addresses three challenges posed by U.S. policy and the contingency contracting environment in Afghanistan: the need to act quickly, the limited U.S. jurisdiction over Afghan nationals and Afghan companies, and the

52 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES

FIGURE 2.2

SIGAR INVESTIGATIONS: CUMULATIVE REFERRALS FOR SUSPENSION AND DEBARMENT, Q2 FY 2011–Q2 FY 2017

1,000

800

600

400

200

0 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Q2–Q4 Q1–Q4 Q1–Q4 Q1–Q4 Q1–Q4 Q1–Q4 Q1–Q2

Source: SIGAR Investigations Directorate, 4/6/2017. vetting challenges inherent in the use of multiple tiers of subcontractors. SIGAR continues to look for ways to enhance the government’s responses to these challenges through the innovative use of information resources and investigative assets both in Afghanistan and the United States. SIGAR makes referrals for suspensions and debarments—actions taken by U.S. agencies to exclude companies or individuals from receiving federal contracts or assistance because of misconduct—based on completed investigations that SIGAR participates in. In most cases, SIGAR’s referrals occur in the absence of acceptance of an allegation for criminal prosecution or remedial action by a contracting office and are therefore the primary remedy to address contractor misconduct. In making referrals to agencies, SIGAR provides the basis for a suspension or debarment decision by the agency as well as all of the supporting documentation needed for an agency to support that decision should it be challenged by the contractor at issue. Based on the evolving nature of the contracting environment in Afghanistan and the available evidence of contractor misconduct and/or poor performance, on occasion SIGAR has found it necessary to refer individuals or companies on multiple occasions for consideration by agency suspension and debarment officials. During the 12-month period prior to April 1, 2017, referrals by SIGAR’s suspension and debarment program resulted in the exclusion of 82 individuals and companies from contracting with the Government. SIGAR’s referrals over this period represent allegations of theft, fraud, poor performance,

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 53 SIGAR OVERSIGHT ACTIVITIES

financial support to insurgents and mismanagement as part of reconstruction contracts valued at $149,067,950.62.

Contractor Debarred Based on Possession of Narcotics On March 31, 2017, as the result of an investigation by SIGAR and the NATO- Resolute Support International Military Police, Andrew Joseph Belgin, a contractor employee, was debarred by the Department of the Army based on his September 25, 2016, arrest at Hamid Karzai International Airport, Kabul, for possession of narcotics and the use of altered identification to enter and exit NATO facilities, specifically, after Belgin was observed meeting with an Afghan civilian outside the north gate of the airport in what Belgin characterized as an attempt to give that person surplus “medical supplies.” Upon his return to the NATO facility at the airport, Belgin was taken into custody. A search of his person and living quarters resulted in the seizure of 29 small blue pills marked “OC 80,” 90 tablets of Valium in three packages, 20 vials of morphine in small glass vials, two vials with fluid labeled “testos- terone,” one vial containing white powder labeled “chorionic gonodotrophin injection,” two plastic bags containing the herbal drugs Thai Kratom and Bali Kratom, and various other unknown substances, pills, and syringes. A search of a storage container used by Belgin resulted in the discovery of signaling flares, 48 smoke grenades, expended ordnance, and weapon parts stored inside of ammunition tins. An altered contractor identification badge was also seized from Belgin. As a result, Belgin was immediately terminated by his employer, escorted to the international departures area and placed on a flight out of Afghanistan. Based on the findings of the SIGAR and International Military Police investigation, Belgin was debarred by the Army for a period of three years, ending on February 16, 2020, a period of time that takes into account the period that they were in proposed debarment status. OTHER SIGAR OVERSIGHT ACTIVITIES • Inspector General Sopko Speaks at the University of Ottawa and Meets with Canadian Development and Law OTHER SIGAR OVERSIGHT ACTIVITIES Enforcement Officials • Inspector General Sopko Speaks at Duke University and Meets with the U.S. Inspector General Sopko Speaks at the University of Attorney for the Eastern District of North Ottawa and Meets with Canadian Development and Law Carolina and Commanding General of U.S. Army Special Operations Enforcement Officials Command at Fort Bragg On April 5, 2017, Inspector General (IG) Sopko spoke at the Centre for • Inspector General Sopko Delivers International Policy Studies and the Fragile States Research Network at the Remarks at a World Bank-Sponsored University of Ottawa. IG Sopko opened by reflecting on Canada’s early post- Anti-Fraud Roundtable and Meets with OECD and French Anti-Money- 9/11 sacrifices and its continuing commitment towards achieving stability Laundering Organizations in Afghanistan. • Deputy Inspector General Aloise While in Ottawa, IG Sopko also met with officials at Global Affairs Speaks at the Naval Postgraduate School Canada, the Canadian government’s foreign affairs, trade, and development office. IG Sopko met with Assistant Deputy Minister for Asia-Pacific Donald

54 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES

Bobiash to discuss future cooperation between the Canadian Embassy in Kabul and SIGAR, and Canada’s future commitments to Afghanistan. He also met with Assistant Deputy Minister for International Security Mark Gwozdecky and discussed SIGAR’s ongoing anticorruption efforts in Afghanistan and thanked the Canadian government for the support of the Embassy in Kabul for those efforts. IG Sopko held a wide-ranging meeting with the cross-directorate Afghanistan team at Global Affairs Canada, where primary concerns focused on the oversight of multilateral trust funds, and how to assess the effectiveness of development work in Afghanistan. Before departing Ottawa, IG Sopko met with the Director of International Programs at the national headquarters of the Royal Canadian Mounted Police to discuss ongoing and future cooperation on SIGAR investigations, and also exchange information on the Afghan narcotics problem, as the majority of Canadian heroin originates in Afghanistan. IG Sopko with Royal Canadian Mounted Inspector General Sopko Speaks at Duke University and Police Superintendent Rob Gilchrist. Meets with the U.S. Attorney for the Eastern District of North (SIGAR photo by Steve Mocsary) Carolina and Commanding General of U.S. Army Special Operations Command at Fort Bragg On March 23, 2017, IG Sopko spoke at the Sanford School of Public Policy, Duke University. He opened by identifying the need for cross-agency oversight as the impetus for creating SIGAR as a special agency to monitor the overall reconstruction effort. IG Sopko pointed out several successes as a result of the Afghanistan reconstruction effort, including the Taliban’s removal from power, al-Qaeda’s loss of a safe haven, the peaceful transfer of power following national elections, and the improving healthcare and education sectors. During his visit to Duke, the IG also held roundtables with mid-career students from the Masters in International Development program and with members of the Counterterrorism and Public Policy Fellowship program, which consists of O-5 and O-6 level military officers in a military continuing-education course. Most of the officers had served at least one tour in Afghanistan. Both discussions focused on the practicalities and problems with implementing U.S. development policy during Afghanistan’s current state of conflict. While in North Carolina, IG Sopko met with Acting U.S. Attorney General for the Eastern District of North Carolina John Stuart Bruce and the Federal Bureau of Investigation to discuss ongoing investigative work. SIGAR’s work, along with other law enforcement partners, has resulted in the convictions of 14 U.S. military members in the Eastern District of North Carolina alone, with some sentences as lengthy as 10 years for crimes related to corruption in Afghanistan. Over $27 million has been recovered for the taxpayer just from the efforts of SIGAR, its law enforcement partners, and this U.S. Attorney’s office.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 55 SIGAR OVERSIGHT ACTIVITIES

Before departing North Carolina, IG Sopko visited Fort Bragg, the home of Army Special Forces Operations Command, where he met Commanding General Kenneth Tovo to discuss ways in which SIGAR could help prepare the 20,000-plus Special Forces members under his command to avoid the activities that have earned a few of their predecessors criminal convictions. General Toyo saw value in instituting a SIGAR education program for his Special Forces command, and SIGAR is working with his staff to develop such a program for the units that deploy to Afghanistan. Inspector General Sopko Delivers Remarks at a World Bank- Sponsored Anti-Fraud Roundtable and Meets with OECD and French Anti-Money-Laundering Organizations In February 2017, IG Sopko delivered remarks at a World Bank-sponsored donor roundtable in Paris, France. The subject of the roundtable was best IG Sopko speaking at Duke University. practices for oversight in fragile states. IG Sopko’s remarks discussed (SIGAR photo by Steve Mocsary) SIGAR’s recently published High-Risk List report on oversight priorities for Afghanistan, as well as SIGAR’s Lessons Learned report on U.S. anticorruption efforts in Afghanistan. Many of the World Bank donor members were eager to learn from SIGAR’s experience in Afghanistan, and offered their experiences and best practices for fighting corruption in Afghanistan and other fragile states. Many donor countries were concerned with oversight of multilateral trust funds, and how to assess their effectiveness in environments like Afghanistan. IG Sopko also met with the Organization for Economic Cooperation and Development’s (OECD) Anti-Corruption Division, the Financial Action Task Force (FATF), and TRACFIN, an agency of the French Ministry of Finance tasked with fighting money laundering, organized crime, and terrorism. During the OECD meeting, IG Sopko addressed the staff of the Anti- Corruption Division. His remarks focused on SIGAR’s anticorruption Lessons Learned report and areas where the OECD and SIGAR may be able to work together to combat corruption in Afghanistan. Given FATF’s ongoing review of Afghanistan, the IG’s meeting was timely. He explained SIGAR’s cooperation with the Afghanistan Financial Intelligence Unit (FinTRACA). FATF was very interested to learn of SIGAR’s cooperation with FinTRACA and other entities in Afghanistan to fight corruption, and SIGAR’s assessment of FinTRACA’s capabilities. Deputy Inspector General Aloise Speaks at the Naval Postgraduate School On April 7, 2017, Deputy Inspector General (DIG) Gene Aloise spoke at the Naval Postgraduate School about lessons from the $117 billion U.S. reconstruction effort in Afghanistan. During his speech, he pointed out that Afghanistan’s reconstruction has cost more than was spent reconstructing

56 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES

16 countries after World War II under the Marshall Plan, and that reconstruction activities are expected to continue in Afghanistan at a cost of roughly $5–6 billion annually. DIG Aloise said that although these monies have touched nearly every aspect of Afghan life, large amounts of U.S. taxpayer dollars have been lost to waste, fraud, and abuse. He told the audience that “the number one reason for the misuse of U.S. taxpayer dollars has been that we spent too much money, too fast, in too small an economy, with too little oversight.” To account for these funds and to prevent further misuse, in 2008 Congress mandated the creation of SIGAR. DIG Aloise’s speech focused on four areas of concern that SIGAR considers critical for reconstruction success now and during similar efforts in the future. These areas include enhancing the Afghan security sector, curbing corruption, succeeding at counternarcotics, and enabling sustainability. DIG Aloise emphasized that U.S. agencies and partners should ensure that programs have clear objectives, measurable benchmarks, and sustainable end-states and that successful reconstruction needs consistent oversight and coordination across U.S. entities, Afghan institutions, international donors, and non-governmental organizations.

SIGAR BUDGET SIGAR is funded through April 28, 2017, under the Further Continuing and Security Assistance Appropriations Act, 2017, which provides the agency prorated funds based on the FY 2016 amount of $56.9 million until the next appropriations law is signed. The budget supports SIGAR’s oversight activities and products by funding SIGAR’s Audits and Inspections, Investigations, Management and Support, and Research and Analysis Directorates, as well as the Special Projects Team and the Lessons Learned Program.

SIGAR STAFF SIGAR’s staff count remained steady since the last report to Congress, with 190 employees on board at the end of the quarter; 28 SIGAR employees were at the U.S. Embassy Kabul and two others were at Bagram Airfield. SIGAR employed six Afghan nationals in its Kabul office to support the Investigations and Audits Directorates. In addition, SIGAR supplements its resident staff with personnel assigned to short-term temporary duty in Afghanistan. This quarter, SIGAR had 13 employees on temporary duty in Afghanistan for a total of 186 days.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 57 “The United States is committed to the Resolute Support Mission and to our support for Afghan forces. NATO’s ‘Train, Advise, and Assist’ mission is essential to our shared goal of ensuring that Afghanistan develops the capability to contribute to regional stability and prevail over terrorist threats, including al-Qaeda and ISIS.”

—Secretary of State Rex W. Tillerson

Source: Secretary of State Rex W. Tillerson, “Remarks by Secretary of State at NATO Foreign Ministerial Intervention,” press release, Brussels, Belgium, 3/31/2017. RECONSTRUCTION 3UPDATE

59 RECONSTRUCTION UPDATE

CONTENTSRECONSTRUCTION UPDATE CONTENTS

Overview 61 Status of Funds 64 Security 80 Governance 122 Economic and Social Development 154 Counternarcotics 188

Photo on previous page Soldiers from the Afghan National Army’s 215th Corps train in clearing buildings in Helmand Province, Afghanistan. (NATO photo by Kay M. Nissen)

60 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION RECONSTRUCTION UPDATE

RECONSTRUCTION UPDATE

This quarter, General John W. Nicholson Jr., commander of U.S. and NATO troops in Afghanistan, characterized the security situation in Afghanistan as a “stalemate” and expressed concern over the high number of casualties taken by the Afghan National Defense and Security Forces (ANDSF). To break the stalemate, General Nicholson and General Joseph L. Votel, commander of U.S. Central Command, requested additional troops, who could come from the United States as well as NATO allies. U.S. and NATO leaders agree that additional troops and expanded authorities would enable their forces to provide the necessary advisory support below the ANDSF’s corps level, helping to address Afghan forces’ capability gaps, assist in essential leadership development, and allow for greater oversight of the U.S. taxpayer dollars committed to the ANDSF. While the ANDSF have prevented the Taliban from capturing and holding any provincial capitals, security incidents and armed clashes have increased, civilian casualties reached new heights, and the insurgents retained control of certain rural areas. Fighting this quarter between the ANDSF and enemy combatants was particularly heavy in the key areas of Helmand, Nangarhar, Kandahar, Kunar, and Ghazni. This quarter, Russia appeared to step up its involvement in Afghanistan. On December 2, General Nicholson labeled Russia, Pakistan, and Iran as malign actors that enable insurgent or terrorist groups in Afghanistan. Nicholson said that Russia lends public legitimacy to the Taliban, under- mining Afghan government and NATO efforts to stabilize Afghanistan. On March 31, Secretary of Defense James Mattis weighed in on the issue of Russian support for the Taliban, saying “I’m not willing to say at this point if that has manifested into weapons and that sort of thing. But certainly, what they’re up to there in light of their other activities gives us concern.” In an interview with Bloomberg, Russia’s special envoy for Afghanistan, Zamir Kabulov, was quoted as saying that the Taliban “have given up global jihad and have become a national force,” concluding that the Taliban is “justified” in opposing a foreign military presence. Throughout the quarter, the National Unity Government grappled with political challenges ranging from defiance from Vice President Abdul Rashid Dostum, a former warlord whose bodyguards are charged with sodomizing

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 61 RECONSTRUCTION UPDATE

General John W. Nicholson Jr., Resolute Support and USFOR-A commander, briefs reporters at the Pentagon. (DOD photo by Staff Sgt. Jette Carr, USAF) a political opponent, to resolving conflicts with the parliament over a path to promised parliamentary elections and Afghanistan’s 2019 presidential contest. The UN Secretary-General in March called on Afghan political elites to work together, saying “a cohesive working relationship between the President [Ashraf Ghani] and the Chief Executive [Abdullah Abdullah] will remain vital.” On January 16, 2017, the Afghan parliament passed a $6.4 billion budget for Fiscal Year 1396, which runs from December 22, 2016, through December 21, 2017. Domestic revenues are to pay for 38% of the budget, with donor assistance covering the rest. The international Financial Action Task Force (FATF) said Afghanistan has substantially addressed the technical requirements of its anti-money- laundering/combating the financing of terrorism (AML/CFT) compliance plan. A FATF team is expected to visit Afghanistan next quarter to monitor the extent to which required reforms and actions to address deficiencies are being implemented. Favorable findings could lead to Afghanistan’s removal from FATF’s list of countries with strategic AML/CFT deficiencies. Yet, this quarter, the State Department again listed Afghanistan as a major money- laundering country whose financial institutions either engage in, or are vulnerable to, transactions involving significant criminal proceeds. In late March 2017, President Ghani nominated Nargis Nehan as the new Minister of Mines and Petroleum, and directed parliament to schedule a vote of confidence. Nehan became acting minister on April 1.

62 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION RECONSTRUCTION UPDATE

Despite a U.S. investment of $8.5 billion to counter Afghanistan’s illicit narcotics economy, the country remains the world’s largest opium producer and exporter—producing an estimated 80% of the world’s heroin. The narcotics industry—coupled with rampant corruption and fraud—is a major source of illicit revenue. In December 2016, General Nicholson said the opium trade provides about 60% of the Taliban’s funding. Cumulative appropriations for relief and reconstruction in Afghanistan totaled approximately $117.3 billion, as of March 31, 2017. Of the total cumulative amount appropriated for Afghanistan reconstruction, $98.8 billion went to the seven major reconstruction funds featured in the Status of Funds subsection of this report. Approximately $7.2 billion of this amount remained available for potential disbursement.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 63 FUNDING

STATUS OF FUNDS CONTENTS

U.S. Reconstruction Funding for Afghanistan 66 Afghanistan Reconstruction Funding Pipeline 68 Afghanistan Security Forces Fund 70 ASFF Budget Activities 71 Commander’s Emergency Response Program 72 Afghanistan Infrastructure Fund 73 Task Force for Business and Stability Operations 74 DOD Drug Interdiction and Counter-Drug Activities 75 Economic Support Fund 76 International Narcotics Control and Law Enforcement 77 International Reconstruction Funding for Afghanistan 78

64 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION FUNDING

STATUS OF FUNDS

To fulfill SIGAR’s legislative mandate, this section details the status of U.S. funds appropriated, obligated, and disbursed for reconstruction activities in Afghanistan. As of March 31, 2017, the United States had appropriated approximately $117.26 billion for relief and reconstruction in Afghanistan since FY 2002. This total has been allocated as follows: • $71.17 billion for security ($4.33 billion for counternarcotics initiatives) • $32.28 billion for governance and development ($4.18 billion for counternarcotics initiatives) • $3.01 billion for humanitarian aid • $10.79 billion for civilian operations Figure 3.1 shows the major U.S. funds that contribute to these efforts.

FIGURE 3.1

U.S. FUNDS SUPPORTING AFGHANISTAN RECONSTRUCTION EFFORTS ($ BILLIONS)

FUNDING SOURCES (TOTAL: $117.26) ASFF: Afghanistan Security Forces Fund CERP: Commander’s Emergency ASFF CERP AIF TFBSO DOD CN ESF INCLE Other Response Program

AIF: Afghanistan Infrastructure Fund $66.02 $3.68 $0.99 $0.82 $3.02 $19.41 $4.88 $18.44 TFBSO: Task Force for Business and AGENCIES Stability Operations DOD CN: DOD Drug Interdiction and Department of Distributed Counter-Drug Activities Department of Defense (DOD) USAID State (State) to Multiple a ESF: Economic Support Fund $74.53 $19.41 $4.88 Agencies $18.44 INCLE: International Narcotics Control and Law Enforcement

Note: Numbers have been rounded. Other: Other Funding a Multiple agencies include DOJ, State, DOD, USAID, Treasury, USDA, DEA, Broadcasting Board of Governors (BBG), and SIGAR. Source: DOD, response to SIGAR data call, 4/17/2017, 4/13/2017, 4/11/2017, 10/22/2012, 10/14/2009, and 10/1/2009; State, response to SIGAR data call, 4/10/2017, 1/6/2017, 1/18/2017, 5/4/2016, 10/20/2015, 4/15/2015, 4/15/2014, 6/27/2013, 10/5/2012 and 6/27/2012; Treasury, response to SIGAR data call, 3/24/2017; OMB, response to SIGAR data call, 4/16/2015, 7/14/2014, 7/19/2013 and 1/4/2013; USAID, response to SIGAR data call, 4/11/2017, 10/15/2010, 1/15/2010, and 10/9/2009; DOJ, response to SIGAR data call, 4/14/2017 and 7/7/2009; USDA, response to SIGAR data call, 4/2009; DFAS, "AR(M) 1002 Appropriation Status by FY Program and Subaccounts March 2017," 4/15/2017; OSD Comptroller, 16-22 PA: Omnibus 2016 Prior Approval Request, 6/30/2016; Pub. L. Nos. 114-113, 113-235, 113-76, 113-6, 112-74, 112-10, 111-212, 111-118.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 65 FUNDING

U.S. RECONSTRUCTION FUNDING FOR AFGHANISTAN ASFF CERP AIF TFBSO DOD CN ESF INCLE Other As of March 31, 2017, cumulative appropriations for relief and reconstruction in Afghanistan totaled approximately $117.26 billion, as shown in Figure 3.2. This total falls into four major categories: security, governance and devel- DOD USAID State opment, humanitarian, and oversight and operations. Approximately $8.51 billion of these funds support counternarcotics initiatives which crosscut the security ($4.33 billion) and governance and development The amount provided to the seven major ($4.18 billion) categories. For more information see Appendix B. U.S. funds represents nearly 84.3% (over At the end of the fiscal quarter, the U.S. government was operating $98.82 billion) of total reconstruction assis- tanceASFF in Afghanistan since FY 2002. Of this under a continuing resolution for FY 2017. As a result, Figure 3.3 shows the amount, more than 92.9% (nearly $91.81 bil- FY 2017 funding made available for obligation under continuing resolutions, lion) has been obligated, and nearly 88.1% as of March 31, 2017. (almost $87.06 billion)DOD has been disbursed. On March 16, President Donald Trump requested additional FY 2017 An estimated $4.60 billion of the amount appropriations for DOD and the Department of Homeland Security. None appropriated these funds has expired. of the additional funding was allocated to reconstruction. The amount

FIGURE 3.2

CUMULATIVE APPROPRIATIONS BY FUNDING CATEGORY, AS OF MARCH 31, 2017 ($ BILLIONS) CERP

$117.26 $120 $115.28 DOD $110 $109.49 $103.27 $100 $96.46

$90 $86.83

$80 DOD CN $72.18 $70

$60 $56.32DOD

$50

$40

$30 ESF $20

$10 USAID

$0 2002–2010 2011 2012 2013 2014 2015 2016 2017a

Security Governance/Development Humanitarian Civilian Operations Total

Note: Numbers have been rounded. DOD reprogrammedINCLE $1 billion from FY 2011 ASFF, $1 billion from FY 2012 ASFF, and $178 million from FY 2013 ASFF to fund other DOD OCO requirements. ASFF data re ects the following rescissions: $1 billion from FY 2012 in Pub. L. No. 113-6, $764.38 million from FY 2014 in Pub. L. No. 113-235, and $400 million from FY 2015 in Pub. L. No. 114-113. DOD reprogrammed $230 million into FY 2015 ASFF. DOD transferred $101 million from FY 2011 AIF, $179.5 million from FY 2013 AIF, and $55 million from FY 2014 AIF to the ESF to fund infrastructure projects implemented by USAID. a FY 2017 gures re ect amounts made available for obligation under continuing resolutions. Source: DOD, response to SIGAR data call, 4/17/2017,State 4/13/2017, 4/11/2017, 10/22/2012, 10/14/2009, and 10/1/2009; State, response to SIGAR data call, 4/10/2017, 1/6/2017, 1/18/2017, 5/4/2016, 10/20/2015, 4/15/2015, 4/15/2014, 6/27/2013, 10/5/2012 and 6/27/2012; Treasury, response to SIGAR data call, 3/24/2017; OMB, response to SIGAR data call, 4/16/2015, 7/14/2014, 7/19/2013 and 1/4/2013; USAID, response to SIGAR data call, 4/11/2017, 10/15/2010, 1/15/2010, and 10/9/2009; DOJ, response to SIGAR data call, 4/14/2017 and 7/7/2009; USDA, response to SIGAR data call, 4/2009; DFAS, "AR(M) 1002 Appropriation Status by FY Program and Subaccounts March 2017," 4/15/2017; OSD Comptroller, 16-22 PA: Omnibus 2016 Prior Approval Request, 6/30/2016; Pub. L. Nos. 114-113, 113-235, 113-76, 113-6, 112-74, 112-10, 111-212, 111-118.

AIF

66 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION DOD

TFBSO

DOD FUNDING

requested for the ASFF remained at the $4.26 billion established in President TABLE 3.1 Barack Obama’s November 2016 amended FY 2017 OCO budget request.31 The United States aims to channel at least 50% of its development U.S. ON-BUDGET ASSISTANCE TO AFGHANISTAN, SINCE 2002 ($ MILLIONS) assistance on-budget to the Government of Afghanistan,32 either directly to Afghan government entities or via contributions to multilateral trust Government-to-Government funds.33 Since 2002, the United States has provided more than $10.43 bil- DOD $4,946 lion in on-budget assistance. This includes about $5.69 billion to Afghan State 92 USAID 655 government ministries and institutions, and nearly $4.74 billion to three multinational trust funds—the World Bank’s Afghanistan Reconstruction Multilateral Trust Funds Trust Fund (ARTF), the United Nations Development Programme’s Law and LOTFA $1,641 Order Trust Fund (LOTFA), and the Asian Development Bank’s Afghanistan ARTF 2,947 Infrastructure Trust Fund (AITF). Table 3.1 shows U.S. on-budget assistance. AITF 153 Note: Numbers have been rounded. Figures reflect amounts the United States has disbursed in on-budget assistance to Afghan government entities and multilateral trust funds. As of March 31, 2017, USAID had obligated approximately $1.3 billion for government-to-government assistance.

Source: USAID, response to SIGAR data call, 4/9/2017; DOD, FIGURE 3.3 response to SIGAR data call, 6/25/2015; World Bank, “ARTF: Administrator’s Report on Financial Status as of February 19, APPROPRIATIONS BY FISCAL YEAR, AMOUNT, AND CATEGORY ($ BILLIONS) 2017 (end of 2nd month of FY 1396),” p. 4; UNDP, response to SIGAR data call, 4/17/2017.

$20

$18 $16.71 $16 $15.86 $14.65 $14

$12

$10 $9.63

$8 $6.81 $6.22 $6 $5.79

$1.98 $2

$0 2010 2011 2012 2013 2014 2015 2016 2017a

Security Governance/Development Humanitarian Civilian Operations Total

Note: Numbers have been rounded. DOD reprogrammed $1 billion from FY 2011 ASFF, $1 billion from FY 2012 ASFF, and $178 million from FY 2013 ASFF to fund other DOD OCO requirements. ASFF data re ects the following rescissions: $1 billion from FY 2012 in Pub. L. No. 113-6, $764.38 million from FY 2014 in Pub. L. No. 113-235, and $400 million from FY 2015 in Pub. L. No. 114-113. DOD reprogrammed $230 million into FY 2015 ASFF. DOD transferred $101 million from FY 2011 AIF, $179.5 million from FY 2013 AIF, and $55 million from FY 2014 AIF to the ESF to fund infrastructure projects implemented by USAID. a FY 2017 gures re ect amounts made available for obligation under continuing resolutions. Source: DOD, response to SIGAR data call, 4/17/2017, 4/13/2017, 4/11/2017, 10/22/2012, 10/14/2009, and 10/1/2009; State, response to SIGAR data call, 4/10/2017, 1/6/2017, 1/18/2017, 5/4/2016, 10/20/2015, 4/15/2015, 4/15/2014, 6/27/2013, 10/5/2012 and 6/27/2012; Treasury, response to SIGAR data call, 3/24/2017; OMB, response to SIGAR data call, 4/16/2015, 7/14/2014, 7/19/2013 and 1/4/2013; USAID, response to SIGAR data call, 4/11/2017, 10/15/2010, 1/15/2010, and 10/9/2009; DOJ, response to SIGAR data call, 4/14/2017 and 7/7/2009; USDA, response to SIGAR data call, 4/2009; DFAS, "AR(M) 1002 Appropriation Status by FY Program and Subaccounts March 2017," 4/15/2017; OSD Comptroller, 16-22 PA: Omnibus 2016 Prior Approval Request, 6/30/2016; Pub. L. Nos. 114-113, 113-235, 113-76, 113-6, 112-74, 112-10, 111-212, 111-118.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 67 FUNDING

AFGHANISTAN RECONSTRUCTION FUNDING PIPELINE Since 2002, Congress has appropriated nearly $117.26 billion for Afghanistan relief and reconstruction. Of this amount, $98.82 billion (84.3%) was appropriated to the seven major reconstruction funds, as shown in Table 3.3.

FIGURE 3.4 TABLE 3.3

CUMULATIVE AMOUNT REMAINING CUMULATIVE AMOUNTS APPROPRIATED, OBLIGATED, AND DISBURSED TO BE DISBURSED ($ BILLIONS) FY 2002–2017 ($ BILLIONS) Appropriated Obligated Disbursed Remaining Afghanistan Security Forces Fund Total Appropriated: $98.82 $66.02 $62.56 $61.41 $2.57 (ASFF) Commander’s Emergency Response Remaining 3.68 2.29 2.28 0.01 Program (CERP) $7.17 Afghanistan Infrastructure Fund (AIF) 0.99 0.78 0.64 0.14 Task Force for Business & Stability 0.82 0.75 0.64 0.11 Operations (TFBSO) Expired Disbursed DOD Drug Interdiction and Counter- $4.60 $87.06 3.02 3.02 3.02 0.00 Drug Activities (DOD CN) Economic Support Fund (ESF) 19.41 17.85 15.10 3.57 International Narcotics Control & Law 4.88 4.55 3.98 0.76 Enforcement (INCLE) Total Major Funds $98.82 $91.81 $87.06 $7.17 Other Reconstruction Funds 7.65 Civilian Operations 10.79 Total $117.26

Note: Numbers have been rounded. Amount remaining reflects the total disbursement potential of the seven major reconstruction funds after deducting approximately $4.6 billion that expired before being obligated. Obligated and disbursed DOD CN funds reflect amounts transferred to the military services and defense agencies to be spent for Afghanistan. Figures reflect transfers, rescissions, and reprogramming activity to date.

Source: SIGAR, analysis of appropriating legislation and quarterly obligation and disbursement data provided by DOD, State, and USAID, 4/18/2017.

As of March 31, 2017, approximately $7.17 billion of the amount appropriated to the seven major reconstruction funds remained for possible TABLE 3.2 disbursement, as shown in Figure 3.4. These funds will be used to train, equip, and sustain the ANDSF; complete on-going, large-scale infrastructure FY 2016 AMOUNTS APPROPRIATED projects, such as those funded by the AIF and ESF; combat narcotics pro- ($ MILLIONS) duction and trafficking; and advance the rule of law, strengthen the justice Appropriated sector, and promote human rights. ASFF $3,652.26 The major reconstruction accounts were appropriated $4.79 billion for CERP 5.00 FY 2016. Of this amount, almost $3.31 billion had been obligated from ASFF, DOD CN 138.76 and $138.76 million had been transferred from DOD CN to the military ser- ESF 812.27 vices and defense agencies for obligation and disbursement, as of March 31, INCLE 185.00 2017. Nearly $1.77 billion remained for possible disbursement. Table 3.2 Total Major Funds $4,793.29 shows amounts appropriated the major reconstruction funds for FY 2016.

68 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION FUNDING

Congress appropriated nearly $5.63 billion to the seven major reconstruction funds for FY 2014. Of that amount, more than $826.79 million remained for possible disbursement, as of March 31, 2017, as shown in Table 3.4 and Figure 3.5.

TABLE 3.4 FIGURE 3.5

FY 2014 AMOUNTS APPROPRIATED, OBLIGATED, AND DISBURSED FY 2014 AMOUNT REMAINING ($ MILLIONS) TO BE DISBURSED ($ BILLIONS) Appropriated Obligated Disbursed Remaining

ASFF $3,962.34 $3,947.50 $3,872.60 $74.89 Total Appropriated: $5.63 CERP 30.00 6.62 6.44 0.18 AIF 144.00 130.46 30.57 99.88 TFBSO 122.24 106.77 85.84 20.93 DOD CN 238.96 238.96 238.96 0.00 ESF 907.00 835.71 338.12 497.59 FY 2014 RemainingAMOUNT REMAININGDisbursed INCLE 225.00 224.74 91.42 133.32 $4.66 TO BE DISBURSED$0.83 ($ BILLIONS) Total Major Funds $5,629.54 $5,490.75 $4,663.95 $826.79

Note: Numbers have been rounded. Amount remaining reflects the total disbursement potential of the seven major reconstruc- Total Appropriated: $5.63 tion funds after deducting approximately $139 million that expired before being obligated. Obligated and disbursed DOD CN Expired funds reflect amounts transferred to the military services and defense agencies to be spent for Afghanistan. Figures reflect transfers, rescissions, and reprogramming activity to date. $0.14

Source: SIGAR, analysis of appropriating legislation and quarterly obligation and disbursement data provided by DOD, State, and USAID, 4/18/2017. FY 2015 AMOUNT REMAINING TO BE DISBURSED ($ BILLIONS) Remaining Disbursed Congress appropriated more than $5.03 billion to four of the seven $0.83 $4.66 major reconstruction funds for FY 2015. Of that amount, nearly $1.08 bil- Total Appropriated: $5.03 lion remained for possible disbursement, as of March 31, 2017, as shown in Table 3.5 and Figure 3.6. Expired $0.14 TABLE 3.5 FIGURE 3.6

FY 2015 AMOUNTS APPROPRIATED, OBLIGATED, AND DISBURSED FY 2015 RemainingAMOUNT REMAINING ($ MILLIONS) Disbursed TO BE DISBURSED$1.08 ($ BILLIONS)$3.89 Appropriated Obligated Disbursed Remaining ASFF $3,939.33 $3,935.44 $3,754.27 $181.17 Expired Total Appropriated: $5.03 CERP 10.00 3.37 1.60 1.77 $0.07 ESF 831.90 775.40 20.71 754.69 INCLE 250.00 249.95 109.89 140.07 Total Major Funds $5,031.23 $4,964.16 $3,886.46 $1,077.70

Note: Numbers have been rounded. Amount remaining reflects the total disbursement potential of the seven major reconstruction funds after deducting approximately $67 million that expired before being obligated. Obligated and disbursed Remaining DOD CN funds reflect amounts transferred to the military services and defense agencies to be spent for Afghanistan. Figures Disbursed reflect transfers, rescissions, and reprogramming activity to date. $1.08 $3.89

Source: SIGAR, analysis of appropriating legislation and quarterly obligation and disbursement data provided by DOD, State, and USAID, 4/18/2017. Expired $0.07

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 69 FUNDING ASFF CERP AIF TFBSO DOD CN ESF INCLE Other

DOD USAID State

AFGHANISTAN SECURITY FORCES FUND ASFF The Congress created the Afghanistan Security Forces Fund (ASFF) to provide the ANDSF with equipment, supplies, services, training, and funding, as well as facility and infrastructure repair, renovation, and construction.34 The DOD primary organization responsible for building the ANDSF is the Combined Security Transition Command-Afghanistan.35 ASFF FUNDS TERMINOLOGY DOD reported that nearly $1.87 billion had been made available for DOD reported ASFF funds as appropriated, obligation under the FY 2017 continuing resolution, as of March 31, 2017, obligated, or disbursed increasing total cumulative funding to more than $66.02 billion since 2005.36 Appropriations:CERP Total monies available for On March 16, President Trump requested additional FY 2017 appropriations commitments for DOD and the Department of Homeland Security. The President asked Obligations: Commitments to pay monies for an additional $1.1 billion for Operation Freedom’s Sentinel, none of the DOD additional funding was for reconstruction. The amount requested for the Disbursements: Monies that have been ASFF remained at the $4.26 billion in President Obama’s November 2016 expended amended FY 2017 OCO budget request.37

Source: DOD, response to SIGAR data call, 4/13/2010. As of March 31, 2017, more than $62.56 billion of total ASFF funding had been obligated, of which more than $61.41 billion had been disbursed.38 DOD CN Figure 3.7 displays ASFF funding by fiscal year, and Figure 3.8 shows cumulative amounts made available, obligated, and disbursed.

DOD FIGURE 3.7 FIGURE 3.8

ASFF APPROPRIATED FUNDS BY FISCAL YEAR ASFF FUNDS, CUMULATIVE COMPARISON ($ BILLIONS) ($ BILLIONS)

$12.0 $80 ESF Appropriated Appropriated $66.02 $66.02 Obligated Obligated USAID $9.0 $60 $61.75 $62.56 Disbursed Disbursed $60.71 $61.41

$6.0 $40 INCLE

State $3.0 $20

AIF $0.0 $0 05 07 09 11 13 15 17a As of Dec 31, 2016 As of Mar 31, 2017

DOD Note: Numbers have been rounded. Data re ects reprogramming actions and rescissions. DOD reprogrammed $1 billion of FY 2011, $1 billion of FY 2012, and $178 million of FY 2013 out of the ASFF to fund other DOD requirements. Pub. L. No. 113-6 rescinded $1 billion from FY 2012. Pub. L No. 113-235 rescinded $764.38 million from FY 2014. Pub. L No. 114-113 rescinded $400 million from FY 2015. DOD reprogrammed $230 million into FY 2015 ASFF. a FY 2017 appropriation amount has not been determined. Figure re ects amount made available for obligation under continuing resolutions. Source: DFAS, "AR(M) 1002 Appropriation Status by FY Program and Subaccounts March 2017," 4/15/2017; DFAS, "AR(M) 1002 TFBSO Appropriation Status by FY Program and Subaccounts December 2016," 1/17/2017; Pub. L. Nos. 114-113, 113-235, 113-76, and 113-6; OSD Comptroller, 16-22 PA: Omnibus 2016 Prior Approval Request, 6/30/2016.

DOD 70 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION FUNDING

ASFF BUDGET ACTIVITIES DOD allocates funds to three budget activity groups within the ASFF: Budget Activity Groups: categories • Defense Forces (Afghan National Army, ANA) within each appropriation or fund account • Interior Forces (Afghan National Police, ANP) that identify the purposes, projects, • Related Activities (primarily Detainee Operations) or types of activities financed by the appropriation or fund Funds for each budget activity group are further allocated to four sub-activity groups: Infrastructure, Equipment and Transportation, Training Subactivity Groups: accounting groups and Operations, and Sustainment.39 The Afghanistan Resources Oversight that break down the command’s Council must approve the requirement and acquisition plan for any service disbursements into functional areas requirements in excess of $50 million annually and any non-standard equipment requirement in excess of $100 million.40 As of March 31, 2017, DOD had disbursed more than $61.41 billion Source: DOD, Manual 7110.1-M Department of Defense Budget Guidance Manual, accessed 9/28/2009; Department of for ANDSF initiatives: nearly $41.17 billion for the ANA, and more than the Navy, Medical Facility Manager Handbook, p. 5, accessed $19.93 billion for the ANP. The remaining $388.70 million was directed to 10/2/2009. related activities such as detainee operations. This total is about $78.07 million higher than the cumulative total disbursed due to an accounting adjustment.41 As shown in Figure 3.9, the largest portion of the funds disbursed for the ANA—nearly $18.10 billion—supported ANA troop sustainment. Of the funds disbursed for the ANP, the largest portion—nearly $8.60 billion—also supported sustainment of ANP forces, as shown in Figure 3.10.42

FIGURE 3.9 FIGURE 3.10

ASFF DISBURSEMENTS FOR THE ANA ASFF DISBURSEMENTS FOR THE ANP BY SUBACTIVITY GROUP, BY SUBACTIVITY GROUP, FY 2005–MAR 31, 2017 ($ BILLIONS) FY 2005–MAR 31, 2017 ($ BILLIONS)

Total: $41.17 Total: $19.93

Infrastructure Training and Infrastructure Training and Equipment and $5.84 Operations $3.10 Operations Equipment and Transportation $3.92 $3.70 Transportation $4.54 $13.31

Sustainment $18.10 Sustainment $8.60

Note: Numbers have been rounded. Source: DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts March 2017,” 4/15/2017.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 71 ASFF CERP AIF TFBSO DOD CN ESF INCLE Other

DOD USAID State

FUNDING ASFF

DOD

COMMANDER’S EMERGENCY RESPONSE PROGRAM CERP The Commander’s Emergency Response Program (CERP) enables U.S. commanders in Afghanistan to respond to urgent humanitarian relief and reconstruction requirements in their areas of responsibility by supporting DOD programs that will immediately assist the local population. Funding under this program is intended for small projects estimated to cost less than CERP FUNDS TERMINOLOGY $500,000 each.43 CERP-funded projects may not exceed $2 million each.44 DOD reported CERP funds as appropriated, DOD reported that $957,316 had been obligated and $664,335 had been obligated, or disbursed disbursed from CERP under the FY 2017 continuing resolution, as of DOD CN March 31, 2017.45 Figure 3.11 displays FY amounts made available for CERP. Appropriations: Total monies available for commitments Total cumulative funding for CERP amounted to more than $3.68 billion. Of this amount, nearly $2.29 billion had been obligated, of which nearly Obligations:DOD Commitments to pay monies $2.28 billion had been disbursed. DOD reported that cumulative obliga- Disbursements: Monies that have been tions increased by $147,403 over the quarter, and cumulative disbursements expended increased by $724,832.46 Figure 3.12 provides a cumulative comparison of amounts made available, obligated, and disbursed for CERP. Source: DOD, response to SIGAR data call, 4/14/2010. ESF

FIGURE 3.11 FIGURE 3.12

USAID CERP APPROPRIATIONS BY FISCAL YEAR CERP FUNDS, CUMULATIVE COMPARISON ($ MILLIONS) ($ BILLIONS)

$1,000 $4.0

INCLE Appropriated Appropriated $3.68 $3.68

$800 $3.2 State

$600 $2.4 Obligated Obligated $2.29 $2.29 AIF Disbursed Disbursed $2.27 $2.28 $400 $1.6

DOD

$200 $0.8

TFBSO $0 $0.0 05 07 09 11 13 15 17a As of Dec 31, 2016 As of Mar 31, 2017

DOD Note: Numbers have been rounded. Data may include inter-agency transfers. a FY 2017 appropriation amount has not been determined. Figure re ects amount obligated under continuing resolutions. Source: DOD, response to SIGAR data call, 4/13/2017 and 1/12/2017; OMB, response to SIGAR data call, 1/4/2013; Pub. L. Nos. 114-113, 113-235, 113-76, 113-6, 112-74, and 112-10.

72 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ASFF CERP AIF TFBSO DOD CN ESF INCLE Other

DOD USAID State

ASFF

DOD

CERP

DOD

DOD CN

DOD

ESF

USAID FUNDING

INCLE

State

AFGHANISTAN INFRASTRUCTURE FUND The AIF was established in FY 2011 to pay for high-priority, large-scale AIF infrastructure projects that support the U.S. civilian-military effort. Congress intended for projects funded by the AIF to be jointly selected and managed by DOD and State. Each AIF-funded project is required to have a DOD plan for its sustainment and a description of how it supports the counterinsurgency strategy in Afghanistan.47 The AIF received appropriations from AIF FUNDS TERMINOLOGY FY 2011 through FY 2014. Although the AIF no longer receives appropria- DOD reported AIF funds as appropriated, tions, many projects remain in progress, and DOD may obligate up to obligated, or disbursedTFBSO $50 million from the ASFF to complete existing AIF projects.48 Appropriations: Total monies available for The AIF received cumulative appropriations of over $1.32 billion; how- commitmentsDOD ever, $335.50 million of these funds were transferred to the Economic Obligations: Commitments to pay monies Support Fund (ESF) for USAID’s power transmission lines projects, bringing the cumulative amount remaining in the AIF to $988.50 million.49 Disbursements: Monies that have been expended Figure 3.13 shows AIF appropriations by fiscal year.

As of March 31, 2017, nearly $779.70 million of total AIF funding had Source: DOD, response to SIGAR data call, 4/13/2012. been obligated, and more than $641.39 million had been disbursed, as shown in Figure 3.14.50

FIGURE 3.13 FIGURE 3.14

AIF APPROPRIATIONS BY FISCAL YEAR AIF FUNDS, CUMULATIVE COMPARISON ($ MILLIONS) ($ MILLIONS)

$800 $1,200

Appropriated Appropriated $988.50 $988.50 $600 $900

Obligated Obligated $788.00 $779.70

$400 $600 Disbursed Disbursed $601.87 $641.39

$200 $300

$0 $0 2011 2012 2013 2014 As of Dec 31, 2016 As of Mar 31, 2017

Note: Numbers have been rounded. Updated data resulted in a lower obligated gure than reported last quarter. Data reects the following transfers from AIF to USAID's Economic Support Fund: $101 million for FY 2011, $179.5 million for FY 2013, and $55 million for FY 2014. Source: DFAS, "AR(M) 1002 Appropriation Status by FY Program and Subaccounts March 2017," 4/15/2017; DFAS, "AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2016," 1/17/2017; Pub. L. Nos. 113-76, 113-6, 112-74, and 112-10.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 73 ASFF CERP AIF TFBSO DOD CN ESF INCLE Other

DOD USAID State

ASFF

DOD

CERP

DOD

DOD CN

DOD

ESF

USAID

INCLE

State FUNDING

AIF

DOD

TASK FORCE FOR BUSINESS AND STABILITY OPERATIONS TFBSO In 2010, the TFBSO began operations in Afghanistan aimed at stabilizing the country and countering economically motivated violence by decreasing unemployment and creating economic opportunities for Afghans. TFBSO DOD authorities expired on December 31, 2014, and the TFBSO concluded its operations on March 31, 2015. TFBSO projects included activities intended TFBSO FUNDS TERMINOLOGY to facilitate private investment, industrial development, banking and finan- DOD reported TFBSO funds as appropriated, cial system development, agricultural diversification and revitalization, and obligated, or disbursed energy development.51 Appropriations: Total monies available for Through March 31, 2017, the TFBSO had been appropriated more than commitments $822.85 million since FY 2009. Of this amount, more than $754.36 mil- 52 Obligations: Commitments to pay monies lion had been obligated and nearly $640.63 million had been disbursed. Figure 3.15 displays the amounts appropriated for the TFBSO by fiscal year, Disbursements: Monies that have been and Figure 3.16 provides a cumulative comparison of amounts appropri- expended ated, obligated, and disbursed for the TFBSO and its projects.

Source: DOD, response to SIGAR data call, 4/13/2010. FIGURE 3.15 FIGURE 3.16

TFBSO APPROPRIATIONS BY FISCAL YEAR TFBSO FUNDS, CUMULATIVE COMPARISON ($ MILLIONS) ($ MILLIONS)

$250 $1,000

Appropriated Appropriated $200 $800 $822.85 $822.85 Obligated Obligated $754.36 $754.36 Disbursed Disbursed $150 $600 $640.60 $640.63

$100 $400

$50 $200

$0 $0 09 121011 13 14 15 16 17 As of Dec 31, 2016 As of Mar 31, 2017

Note: Numbers have been rounded. Updated data resulted in a lower disbursed gure than reported last quarter. Of the $822.85 million appropriated the TFBSO, $366.05 million was from the Operations and Maintenance, Army, account to pay for the sustainment of U.S. assets, civilian employees, travel, security, and other operational costs; all FY 2015 funding was from this account. Source: DOD, response to SIGAR data call, 4/17/2017, 1/13/2017, and 10/4/2011; Pub. L. Nos. 113-76, 113-6, 112-74, and 112-10.

74 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ASFF CERP AIF TFBSO DOD CN ESF INCLE Other

DOD USAID State

ASFF

DOD

FUNDING

CERP

DOD

DOD DRUG INTERDICTION AND COUNTER-DRUG ACTIVITIES The DOD Drug Interdiction and Counter-drug Activities (DOD CN) fund DOD CN supports efforts to stabilize Afghanistan by combating the drug trade and related activities. DOD uses the DOD CN to provide assistance to the counternarcotics effort by supporting military operations against drug traf- DOD fickers; expanding Afghan interdiction operations; and building the capacity of Afghan law enforcement bodies—including the Afghan Border Police— DOD CN FUNDS TERMINOLOGY with specialized training, equipment, and facilities.53 DOD reported DOD CN funds as appropriated, DOD CN funds are appropriated by Congress to a single budget line for obligated, or disbursed ESF all military services. DOD reprograms the funds from the Counter-narcotics Appropriations: Total monies available for Central Transfer Account (CTA) to the military services and defense agen- commitments cies, which track obligations of the transferred funds. DOD reported DOD Obligations: Commitments toUSAID pay monies CN accounts for Afghanistan as a single figure for each fiscal year.54 DOD reported that nearly $19.26 million had been transferred from the Disbursements: Monies that have been expended DOD CN CTA to the military services and defense agencies for obligation under FY 2017 continuing resolutions, bringing cumulative funding for DOD Source: DOD, response to SIGAR data call, 4/13/2010.INCLE CN to nearly $3.02 billion since FY 2004, all of which had been transferred to the military services and defense agencies for DOD CN projects, as of March 31, 2017.55 Figure 3.17 shows DOD CN appropriations by fiscal year, State and Figure 3.18 provides a cumulative comparison of amounts appropriated and transferred from the DOD CN CTA.

FIGURE 3.17 FIGURE 3.18 AIF DOD CN APPROPRIATIONS BY FISCAL YEAR DOD CN FUNDS, CUMULATIVE COMPARISON ($ MILLIONS) ($ BILLIONS) DOD $500 $4.0

$400 $3.2 Appropriated Appropriated TFBSO and and Transferredb Transferredb $3.02 $3.02 $300 $2.4 DOD

$200 $1.6

$100 $0.8

$0 $0.0 05 07 0911 13 15 17 As of Dec 31, 2016 As of Mar 31, 2017

Note: Numbers have been rounded. DOD reprogrammed $125.13 million out of FY 2015 DOD CN due to several requirements for the Afghanistan Special Mission Wing being funded from the ASFF instead of DOD CN. a FY 2017 appropriation amount has not been determined. Figure re ects amount transferred to the military services and defense agencies for obligation under continuing resolution. b DOD reprograms all DOD CN funds to the military services and defense agencies for obligation and disbursement. Source: DOD, response to SIGAR data call, 4/11/2017 and 1/13/2017; OSD Comptroller, 15-23 PA: Omnibus 2015 Prior Approval Request, 6/30/2015, p. 42.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 75 ASFF CERP AIF TFBSO DOD CN ESF INCLE Other

DOD USAID State

ASFF

DOD

CERP

DOD

FUNDING

DOD CN

DOD

ECONOMIC SUPPORT FUND ESF Economic Support Fund (ESF) programs advance U.S. interests by helping countries meet short- and long-term political, economic, and security needs. ESF programs support counter-terrorism; bolster national economies; and USAID assist in the development of effective, accessible, independent legal systems for a more transparent and accountable government.56 ESF FUNDS TERMINOLOGY The ESF was appropriated $812.27 million for FY 2016, and USAID USAID reported ESF funds as appropriated, reported no obligations under FY 2017 continuing resolutions, resulting in obligated, or disbursed INCLE no change to ESF’s cumulative funding of $19.41 billion, which includes Appropriations: Total monies available amounts transferred from AIF to ESF for USAID’s power transmission lines for commitments projects. Of this amount, more than $17.85 billion had been obligated, of State 57 Obligations: Commitments to pay monies which nearly $15.10 billion had been disbursed. Figure 3.19 shows ESF appropriations by fiscal year. Disbursements: Monies that have been USAID reported that cumulative obligations as of March 31, 2017, expended decreased by nearly $15.54 million and cumulative disbursements increased AIF 58 Source: USAID, response to SIGAR data call, 4/15/2010. by nearly $286.71 million from the amounts reported last quarter. Figure 3.20 provides a cumulative comparison of the amounts appropriated, obli- DOD gated, and disbursed for ESF programs.

FIGURE 3.19 FIGURE 3.20

ESF APPROPRIATIONS BY FISCAL YEAR ESF FUNDS, CUMULATIVE COMPARISON TFBSO ($ BILLIONS) ($ BILLIONS)

$3.5 $20 DOD Appropriated Appropriated $19.41 $19.41 $3.0 $18 Obligated Obligated $17.87 $17.85 $2.5 $16 Disbursed Disbursed $2.0 $15.10 $14.81 $14 $1.5

$12 $1.0

$10 $0.5 FY 17 APPROPRIATION AMOUNT HAS NOT BEEN DETERMINED

$0.0 $0 0503 07 09 11 13 15 17 As of Dec 31, 2016 As of Mar 31, 2017

Note: Numbers have been rounded. Data re ects the following transfers from AIF to the ESF: $101 million for FY 2011, $179.5 million for FY 2013, and $55 million for FY 2014. Updated data resulted in a lower obligated gure than reported last quarter. Source: USAID, response to SIGAR data call, 4/11/2017 and 1/10/2017; State, response to SIGAR data call, 5/4/2016, 10/20/2015, 4/15/2015, and 4/15/2014.

76 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ASFF CERP AIF TFBSO DOD CN ESF INCLE Other

DOD USAID State

ASFF

DOD

CERP

DOD

DOD CN

DOD

FUNDING

ESF

USAID

INTERNATIONAL NARCOTICS CONTROL AND LAW ENFORCEMENT INCLE The U.S. Bureau of International Narcotics and Law Enforcement Affairs (INL) manages the International Narcotics Control and Law Enforcement (INCLE) account which funds projects and programs for advancing rule of State law and combating narcotics production and trafficking. INCLE supports several INL program groups, including police, counter-narcotics, and rule of INL FUNDS TERMINOLOGY law and justice.59 INL reported INCLE and other INL funds as AIF State reported that INCLE was appropriated $185 million for FY 2016 appropriated, obligated, or disbursed and reported no obligations under FY 2017 continuing resolutions, result- Appropriations: Total monies available ing in no change to INCLE’s cumulative funding of $4.88 billion. Of this for commitmentsDOD amount, more than $4.55 billion had been obligated, of which, nearly Obligations: Commitments to pay monies $3.98 billion had been disbursed.60 Figure 3.21 shows INCLE appropriations by fiscal year. Disbursements: Monies that have been expended State reported that cumulative obligations as of March 31, 2017, TFBSO remained the same as the previous quarter, while cumulative disbursements Source: State, response to SIGAR data call, 4/9/2010. increased more than $110.47 million over amount reported last quarter.61 Figure 3.22 provides a cumulative comparison of amounts appropriated, DOD obligated, and disbursed for INCLE.

FIGURE 3.21 FIGURE 3.22

INCLE APPROPRIATIONS BY FISCAL YEAR INCLE FUNDS, CUMULATIVE COMPARISON ($ MILLIONS) ($ BILLIONS)

$800 $5 Appropriated Appropriated $4.88 $4.88 Obligated Obligated $4.55 $4.55 Disbursed $4 Disbursed $3.98 $600 $3.87

$400

$200 $1 FY 17 APPROPRIATION AMOUNT HAS NOT BEEN DETERMINED

$0 $0 0503 07 09 11 13 15 17 As of Dec 31, 2016 As of Mar 31, 2017

Note: Numbers have been rounded. Data may include inter-agency transfers. Source: State, response to SIGAR data call, 4/13/2017, 1/6/2017, and 4/7/2016.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 77 FUNDING

INTERNATIONAL RECONSTRUCTION FUNDING FOR AFGHANISTAN In addition to assistance provided by the United States, the international community provides a significant amount of funding to support Afghanistan relief and reconstruction efforts. Most of the international funding provided is administered through trust funds. Contributions provided through trust funds are pooled and then distributed for reconstruction activities. The two main trust funds are the Afghanistan Reconstruction Trust Fund (ARTF) and the Law and Order Trust Fund for Afghanistan (LOTFA).62 Contributions to the Afghanistan Reconstruction Trust Fund The largest share of international contributions to the Afghan operational and development budgets comes through the ARTF. From 2002 to February 19, 2017, the World Bank reported 34 donors had pledged over $10.20 billion; more than $9.64 billion had been paid in.63 The World Bank says, donors pledged $697.52 million to the ARTF for Afghan fiscal year 1396, (December 22, 2016, to December 21, 2017).64 Figure 3.23 shows the 11 largest donors for FY 1396. As of February 19, 2017, the United States had pledged more than $3.17 billion and paid in more than $2.95 billion since 2002.65 The United States and the United Kingdom are the two biggest donors to the ARTF, together contributing 48% of its total funding, as shown in Figure 3.24. FIGURE 3.23

ARTF CONTRIBUTIONS FOR FY 1395 BY DONOR, AS OF FEBRUARY 19, 2017 ($ MILLIONS)

Total Commitments: $698 Total Paid In: $141

228 United States 5 195 EC/EU 44 73 Germany 73 72 United Kingdom 0 31 Sweden 0 25 Denmark 0 19 Australia 19 15 Norway 0 12 Japan 0 12 Finland 0 11 Canada 0 3 Others 0 0 50 100 150 200 250 Commitments Paid In

Note: Numbers have been rounded. FY 1396 = 12/22/2016–12/21/2017. Source: World Bank, "ARTF: Administrator's Report on Financial Status as of February 19, 2017 (end of 2nd month of FY 1396)," p. 1.

78 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION FUNDING

Contributions to the ARTF are divided into two funding channels— FIGURE 3.24 the Recurrent Cost (RC) Window and the Investment Window.66 As of ARTF CONTRIBUTIONS PAID IN BY DONORS, February 19, 2017, according to the World Bank, nearly $4.26 billion of 2002–FEBRUARY 19, 2017 ARTF funds had been disbursed to the Afghan government through the RC Window to assist with recurrent costs such as salaries of civil servants.67 Total Paid In: $9.6 billion The RC Window supports the operating costs of the Afghan government because the government’s domestic revenues continue to be insufficient to support its recurring costs. To ensure that the RC Window receives ade- United States quate funding, donors to the ARTF may not “preference” (earmark) more 31% 68 than half of their annual contributions for desired projects. Others United 24% The Investment Window supports the costs of development programs. Kingdom As of February 19, 2017, according to the World Bank, nearly $4.55 billion 17% had been committed for projects funded through the Investment Window, of Germany 8% which almost $3.71 billion had been disbursed. The World Bank reported 26 Netherlands active projects with a combined commitment value of nearly $3.21 billion, 5% Canada 69 EU of which almost $2.37 billion had been disbursed. 7% 7%

Contributions to the Law and Order Trust Fund for Afghanistan Note: Numbers have been rounded. “Others” includes 28 donors. The United Nations Development Programme (UNDP) administers the Source: World Bank, ARTF: Administrator's Report on Financial LOTFA to pay ANP salaries and build the capacity of the Ministry of Interior Status as of February 19, 2017 (end of 2nd month of FY 1396), p. 4. (MOI).70 Since 2002, donors have pledged more than $5.29 billion to the LOTFA, of which nearly $4.96 billion had been paid in, as of April 13, 2017. The United States had committed over $1.66 billion since the fund’s inception and paid in more than $1.64 billion.71 Figure 3.25 shows the four largest donors to the LOTFA since 2002. The LOTFA is in its eighth phase. The phase had an initial estimated FIGURE 3.25 budget of $883.56 million and was designed as a transition to a full handover of payroll functions to the Afghan government and to develop national DONOR CONTRIBUTIONS TO THE LOTFA SINCE 2002, AS OF APRIL 13, 2017 capacity for its management. The Afghan government and LOTFA donors agreed to extend the phase for a year beyond its original planned end date of December 31, 2016, after assessments commissioned by UNDP revealed Total Paid In: $5 billion that the MOI had not yet met various critical donor conditions for the transition of payroll management.72 Phase VIII initial $883.56 million budget was divided between the United States Japan $850.56 million Support to Payroll Management (SPM) project and the 33% 29% $33 million MOI and Police Development (MPD) project, which focuses on institutional development of the MOI and police professionalization of the EU Others 11% ANP. Most project funding—nearly $842.44 million—was to be transferred 20% from the UNDP Country Office to the Ministry of Finance (MOF) for ANP 73 and CPD staff remuneration. Germany From July 1, 2015, through December 31, 2016, UNDP had expended 8% more than $667 million on the SPM project for Phase VIII. Of this amount, Note: Numbers have been rounded. EU = European Union. nearly $661 million was transferred to the MOF to pay for ANP and CPD “Others” includes 26 donors. staff. In addition, nearly $17.39 million was expended on the MPD project.74 Source: UNDP, response to SIGAR data call, 4/17/2017.

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SECURITY CONTENTS

Key Issues and Events 81 U.S. Reconstruction Funding for Security 86 Both Sides Increase Control of Districts 86 U.S. Forces in Afghanistan 89 Quarterly Highlight: Helmand’s Embattled 215th Corps 92 ANDSF Elements Demonstrated Modest Improvements Over Winter Months 95 Afghan National Army 104 Afghan National Police 113 Women Comprise 1.4% of ANDSF Personnel 118 ANDSF Medical and Healthcare 118 Removing Unexploded Ordnance 120

80 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SECURITY

SECURITY

KEY ISSUES AND EVENTS Testifying before the Senate Armed Services Committee on February 9, 2017, General John W. Nicholson Jr., commander of U.S. and NATO troops in Afghanistan, characterized the security situation in Afghanistan as a “stalemate,” saying that he is particularly concerned about the high level of Afghan National Defense and Security Forces (ANDSF) casualties. General Nicholson underscored the importance of Afghanistan for American national security by explaining that because the Afghanistan-Pakistan region has the highest concentration of terrorist groups anywhere in the world, the U.S. counterterrorism mission there plays a key role in protecting our homeland.75 While the ANDSF prevented the Taliban from capturing any provincial capitals, security incidents and armed clashes increased, civilian casual- General John W. Nicholson Jr. testified to ties reached new heights, the ANDSF continued to suffer high casualties, the Senate Armed Services Committee in and insurgents retained control in certain rural areas.76 Meanwhile, U.S. early February about the security situation Forces-Afghanistan (USFOR-A) reports that corruption remains the most in Afghanistan. (Screenshot of DVIDS video) significant obstacle to ANDSF progress.77 Asked how the stalemate could be broken, both General Nicholson and General Joseph L. Votel, commander of U.S. Central Command, advocated for additional troops, which could come from the United States as well as NATO allies.78 General Nicholson suggested that the United States recon- sider troop levels using an “objectives- and conditions-based approach” rather than the force-strength ceiling currently in place.79 U.S. and NATO leaders agree that additional troops and expanded authorities would enable their forces to provide the necessary advisory support below the ANDSF’s corps level. These authorities would be similar to the advising and assisting authorities the U.S. currently employs to support Iraqi forces.80 According to General Nicholson, advising below the corps level would help address the ANDSF’s capability gaps, assist in essential leadership development, and allow for greater oversight of U.S. taxpayer dollars.81 Stressing that the ANDSF needs greater offensive capability in order to break this stalemate, General Nicholson discussed the “critical” importance of congressional funding approval for Department of Defense’s (DOD) plan to replace the Afghan Air Force’s (AAF) aging, Russian-made Mi-17

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helicopter fleet with American-made UH-60 Black Hawks procured from U.S. Army stocks. The advantage of this would be to continue to build indig- enous air capabilities that the Afghan insurgents cannot match.82 The projected bolstering of the AAF, as well as doubling the number of Afghan Special Security Forces (ASSF) is part of a four-year “ANDSF Roadmap” that Afghan President Ashraf Ghani is currently developing together with General Nicholson and other NATO commanders. The over- arching goal of the four-year roadmap is to expand Afghan government control over more territory, increase the proportion of the population resid- ing in that territory, and compel the Taliban to agree to a peace process leading to reconciliation and an end of hostilities.83 USFOR-A said many ANDSF units participated in company-level training, conducted leadership development, and established operational readiness cycles—in which forces refit, retrain, or take leave—during the winter campaign in anticipation of heavy fighting over the next few months.84 The Afghan National Army (ANA) and Afghan National Police (ANP) also saw modest increases in strength and slight decreases in attrition this quarter.85 However, fighting has remained heavy in the key areas of Helmand, Nangarhar, Kandahar, Kunar, and Ghazni.86 Notably, after months of skirmishes with the Taliban in Sangin District of Helmand Province in late March, the ANA’s 215th Corps moved its base of operations out of Sangin’s district center. Sangin has been a strategically important battleground for the 215th Corps, and the United States and its Coalition partners have spent much blood and treasure to help keep Sangin under Afghan government control. The United States is deploying 300 Marines to Helmand this spring to continue supporting the 215th Corps. General Nicholson believes that the Marines’ “deep experience” in Helmand will provide “a more structured advisory effort than [U.S. Forces have] had up to this point.”87 For more information on the challenges facing the 215th Corps, please see the Quarterly Highlight on page 92. Relations between Afghanistan and Pakistan continued to be strained this quarter, with senior officials from both countries blaming the other for insurgent attacks. Pakistan closed its border with Afghanistan to all traffic between February 17 and March 20, conducted cross-border shelling, and targeted suspected militants on Afghan territory. The Afghan government has sought to deescalate these tensions while also pointing to the toll Pakistan’s strikes are taking on Afghan citizens’ security and livelihoods.88 On April 13, 2017, the United States deployed a GBU-43/B Massive Ordnance Air Blast (MOAB) bomb, the largest non-nuclear bomb in its arse- nal, on a network of tunnels utilized by Islamic State-Khorasan Province (IS-K) in Nangarhar Province. Nicknamed the “mother of all bombs” for its size, the GBU-43/B weighs approximately 21,600 pounds and is capable of destroying an area the size of nine city blocks. The April 13 mission was the GBU-43/B’s first combat use. General Nicholson said, “this was the right

82 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SECURITY

weapon against the right target.” Afghan officials initially reported 36 IS-K casualties, but later updated that figure to 94 IS-K fighters killed, including four commanders.89 UN: Record High Security Incidents and Civilian Casualties The United Nations (UN) Secretary-General reported in March that “The ANDSF consistently Afghanistan’s security situation has worsened over the last quarter, with retook district centers and intensifying armed clashes between the Afghan security forces and the population areas within Taliban, and with notable high-profile attacks by insurgent and extremist groups. Security incidents throughout 2016 and continuing into the first days of a loss, whereas in quarter of 2017 reached their highest level since UN reporting began in 2015 it sometimes took 2007. Armed clashes between the security forces and the Taliban comprised them weeks to recover.” 63% of all security incidents in Afghanistan during that period and marked a —General John W. Nicholson Jr., 22% increase from the same period in 2015–2016.90 U.S. Army, Resolute Support and During the last year, half of all recorded security incidents continued USFOR-A commander to occur in the southern, southeastern, and eastern regions, according to the UN.91 Aside from the Taliban’s offensive in Sangin, the other major

offensives this quarter include the Taliban’s attempt to take two districts in Source: General John W. Nicholson Jr., U.S. Army, Resolute Support and USFOR-A commander, Statement for the Record Laghman Province in early March, which the ANDSF foiled, killing a key before the Senate Committee on Armed Services on the Taliban leader; and the fall of Tala Wa Barfak District in Baghlan Province Situation in Afghanistan, 2/9/2017. around March 1, which the ANDSF recaptured from the Taliban just days later on March 3.92 A key achievement of ANDSF and Coalition forces this quarter was the late February killing of Mullah Salam, the Taliban commander and shadow governor for Kunduz Province, who General Nicholson said had “terrorized the people of Kunduz for too long.”93 Kunduz had been the center of intense skirmishes with the Taliban in the last year and a half, during which period Kunduz City fell twice to the Taliban before ANDSF and Coalition forces could regain their hold there.94 U.S. defense officials also announced the killing of another high-profile al-Qaeda leader, Qari Yasin, on March 19 in Paktika Province during a U.S. counterterrorism airstrike. Yasin had plotted multiple al-Qaeda terror attacks, including the September 20, 2008, bombing of the Marriott Hotel in Islamabad that killed dozens of civilians.95 The UN recorded 5,160 security incidents between November 18, 2016, and February 14, 2017, as reflected in Figure 3.26 on the next page, repre- Security incidents: reported incidents senting a 10% increase from the same period the previous year, and a 3% that include armed clashes, improvised increase from the same period in 2014–2015. The number of security inci- explosive devises, targeted killings, dents rose by 30 in January 2017 to 1,877, the highest number ever recorded abductions, suicide attacks, criminal acts, for that month by the UN.96 and intimidation. Reported incidents are The United Nations Assistance Mission in Afghanistan (UNAMA) also not necessarily actual incidents. reported that 11,418 conflict-related civilian casualties occurred between January 1 and December 31, 2016, a 3% increase compared to 2015, and the highest total civilian casualties recorded since UNAMA began document- Source: SIGAR, analysis of the United Nations report, 12/9/2014. ing them in 2009. Of the 11,418 casualties, 3,498 were killed and 7,920 were

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FIGURE 3.26

AVERAGE NUMBER OF REPORTED SECURITY INCIDENTS PER DAY

11/16/2012–2/15/2013 (92 days) 41.1 3,783

2/16/2013–5/15/2013 (89 days) 47.9 4,267

5/16/2013–8/15/2013 (92 days) 64.4 5,922

8/16/2013–11/15/2013 (92 days) 57.4 5,284

11/16/2013–2/15/2014 (92 days) 50.5 4,649

3/1/2014–5/31/2014 (92 days) 63.7 5,864

6/1/2014–8/15/2014 (76 days) 71.8 5,456

8/16/2014–11/15/2014 (92 days) 56.5 5,199

11/16/2014–2/15/2015 (92 days) 55.2 5,075

2/15/2015–4/30/2015 (75 days) 67.1 5,033

5/1/2015–7/31/2015 (92 days) 66.3 6,096

8/1/2015–10/31/2015 (92 days) 71.8 Incidents During Period Total 6,601

12/1/2015–2/15/2016 (77 days) 52.1 4,014

2/16/2016–5/19/2016 (96 days) 63.8 6,122

5/20/2016–8/15/2016 (88 days) 68.1 5,996

8/16/2016–11/17/2016 (94 days) 66.6 6,261

11/18/2016–2/14/2017 (89 days) 41.1 58 5,160

0 10 20 30 40 50 60 70 80

Note: Security incidents were not reported for the month of November 2015. Source: UN, Report of the Secretary-General, The situation in Afghanistan and its implications for International peace and security, 9/7/2016, p. 5; 6/10/2016, p. 4; 3/7/2016, p. 6; 12/10/2015, p. 5; 9/1/2015, p. 4; 6/10/2015, p. 4; 2/27/2015, p. 4; 12/9/2014, p. 5; 9/9/2014, p. 6; 6/18/2014, p. 5; 3/7/2014, p. 5; 12/6/2013, p. 6; 9/6/2013, p. 6; 6/13/2013, p. 5; 3/5/2013, p. 5; 12/13/2016, p. 4; and 3/3/2017, p. 4.

wounded.97 UNAMA found that antigovernment elements, mainly Taliban, were responsible for 61% of the civilian casualties, perpetrating illegal and indiscriminate attacks that deliberately targeted civilians.98 Coalition airstrikes on Taliban targets during fighting in Sangin in early February may have caused as many as 25 civilian casualties, according to UNAMA. RS has acknowledged this possibility and is investigating the incidents.99

High-Profile Attacks While U.S. military leaders say the Islamic State affiliate in Afghanistan, Islamic State-Khorasan Province (IS-K), has been significantly degraded,

84 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SECURITY

A Sardar Daoud Khan Hospital surgeon and a Resolute Support physicians’ advisor discuss the medical management of recently admitted patients following the attack on the hospital in early March. (U.S. Army photo by Catherine Lowrey)

several news media outlets reported on IS-K’s continued ability to conduct deadly attacks this quarter. IS-K claimed responsibility for a large-scale attack in Kabul on March 8 at Afghanistan’s largest military hospital. Armed militants dressed as medical “This past year we became personnel stormed the Sardar Daud Khan Hospital, detonated explosives, increasingly concerned and indiscriminately shot civilians inside. Afghan officials reported more than 50 people were killed.100 Outraged parliamentarians subsequently about the growing threat voted on the impeachment of the Ministers of Defense and Interior and the posed by the ISIS affiliate, Director of the National Security Directorate for failing to thwart the attack, Islamic State-Khorasan but failed to garner enough support.101 Afghan officials are currently investi- (IS-K). Although their gating IS-K’s claim of responsibility and possible help for the terrorists from operational capacity has inside the hospital.102 Several news organizations and Afghan analysts questioned the likeli- diminished as a result of hood that IS-K carried out an attack of this magnitude and complexity given U.S., Afghanistan, and their degraded numbers, the hospital’s heavy security, and IS-K’s proclivity Pakistan military opera- for conducting sectarian attacks against Shia targets. It was also noted that tions, we remain focused the Taliban had previously attacked that same hospital, and that due to a desire for increased political legitimacy, the Taliban have recently avoided on defeating the group in claiming responsibility for attacks that result in high civilian casualties.103 both countries.” On February 8, suspected IS-K militants also fatally shot six International —General Joseph L. Votel, Red Cross workers in an aid convoy in Sheberghan, Jowzjan Province; two Commander of U.S. Central workers are still missing. No one initially claimed responsibility and the Command Taliban denied involvement, but the Jowzjan governor pointed to IS-K, saying that they are “very active” in the area.104 In recent reports, UNAMA and the Watchlist on Children and Armed Source: General Joseph L. Votel, U.S. Army, U.S. CENTCOM Commander, Statement Before the Senate Committee Armed Conflict highlighted the targeting of medical facilities and personnel in Services on the Posture of U.S. Central Command, 3/9/2017.

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Afghanistan. In 2016, UNAMA reported 119 conflict-related incidents targeting or impacting health-care workers.105 A contributing factor could be that last year 23 medical facilities were occupied for military purposes.106 UNAMA attributes responsibility of 80% of these incidents to antigovernment elements, including the Taliban and IS-K, with the remaining 20% to the ANDSF and other pro-government forces.107 Other major high-profile attacks this quarter targeted Afghan government officials and ANDSF personnel. IS-K claimed responsibility for a suicide attack on the Supreme Court in Kabul on February 7 that killed at least 20 people and injured 40 more, many of whom were female employees.108 On March 1, the Taliban attacked a police-district headquarters in Kabul that killed 23 and wounded 106 people. The Afghan Ministry of Interior (MOI) is investigating police claims that the Taliban used chemical weapons during the attack.109

U.S. RECONSTRUCTION FUNDING FOR SECURITY As of March 31, 2017, the U.S. Congress had appropriated more than $71.2 billion to support the ANDSF. This accounts for 60.7% of all U.S. reconstruction funding for Afghanistan since FY 2002.110 In 2005, Congress established the Afghan Security Forces Fund (ASFF) to build, equip, train, and sustain the ANDSF, which comprises all security forces under the Ministry of Defense (MOD) and the Ministry of Interior (MOI). Additionally, ASFF is used to support the Afghan Local Police (ALP), which falls under the authority of the MOI although it is not considered part of the ANDSF. Most U.S.-provided funds were channeled through the ASFF and obligated by either the Combined Security Transition Command- Afghanistan (CSTC-A) or the Defense Security Cooperation Agency. According to DOD, ASFF funds are transferred to Da Afghanistan Bank, the country’s central bank; the Ministry of Finance then sends treasury checks to fund the MOD and MOI based on submitted funding requests.111 Of the $66 billion appropriated for the ASFF, $62.6 billion had been obligated and $61.4 billion disbursed as of March 31, 2017.112 This section discusses assessments of the Afghan National Army (ANA), Afghan National Police (ANP), and the Ministries of Defense and Interior. It also gives an overview of how U.S. funds are used to build, equip, train, and sustain the Afghan security forces.

BOTH SIDES INCREASE CONTROL OF DISTRICTS Preventing insurgents from increasing their control or influence of districts continues to be a challenge for the ANDSF. According to USFOR-A, the districts under Afghan government and insurgent control both increased this quarter.113 The number of contested districts fell. There was also an increase

86 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SECURITY

FIGURE 3.27

HISTORICAL DISTRICT CONTROL OF AFGHANISTAN’S 407 DISTRICTS AS OF FEBRUARY 20, 2017

57% 60% 66% 63% 72% 71%

Afghan Government Control or In uence 33% 29% 25% 29% 21% 23% Contested

11% 7% 6% 9% 8% 10% Insurgent Control or In uence Nov 2015 Jan 2016 May 2016 Aug 2016 Nov 2016 Feb 2017

Source: USFOR-A, response to SIGAR data call, 02/20/2017.

in the percentage of the Afghan population living in areas under both government and insurgent control or influence. USFOR-A reported that approximately 59.7% of the country’s 407 districts are under Afghan government control or influence as of February 20, 2017, a 2.5 percentage-point increase from the 57.2% reported last quarter in mid-November, but a nearly 11 percentage-point decrease from the same period in 2016. See Figure 3.27 for a historical record of district control. The number of districts under insurgent control or influence also increased by four this quarter to 45 districts (in 15 provinces) under insurgent control (11) or influence (34). According to USFOR-A, 11.1% of the country’s total districts are now under insurgent control or influence.114 USFOR-A attributes the loss of government control or influence over territory to the ANDSF’s strategic approach to security prioritization, identifying the most important areas that the ANDSF must hold to prevent defeat, and placing less emphasis on less vital areas.115 With the increase in both insurgent- and government-controlled districts, the number of contested districts (119) dropped by 3.5 percentage points since last quarter, to 29.2% of all districts. It is not clear whether these districts are at risk or if neither the insurgency nor the Afghan government maintains significant control over these areas, as USFOR-A has previously described.116 As reflected in Table 3.6 on the next page, of the 407 districts of Afghanistan’s 34 provinces, 243 districts were under government control (97 districts) or influence (146).117 USFOR-A reports an 800,000-person increase in the population under Afghan government control or influence this quarter. Last quarter, USFOR-A

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TABLE 3.6

DISTRICT CONTROL WITHIN AFGHANISTAN’S 34 PROVINCES AS OF FEBRUARY 20, 2017 Control Status Districts Population Area Number % In millions % Sq Km % GIROA 21.4 65.6% 404,503 62.8% Control 97 23.8% Influence 146 35.9% CONTESTED 119 29.2% 8.2 25.2% 135,218 21.0% INSURGENT 3.0 9.2% 104,068 16.2% Control 11 2.7% Influence 34 8.4% Total 407 100% 32.6 100% 643,789 100%

Note: GIROA = Government of the Islamic Republic of Afghanistan, sq km = square kilometers.

Source: USFOR-A, response to SIGAR data call, 02/20/2017; USFOR-A, response to SIGAR vetting, 4/11/2017. remarked that the population under insurgent control or influence had decreased by half a million people from the previous reporting period, to 2.5 million people. However, this quarter, they assess that the population under insurgent control or influence has returned to 3 million people.118 As reflected in Table 3.6, of the 32.6 million people living in Afghanistan, USFOR-A determined that the majority, 21.4 million (65.6%), live in areas controlled or influenced by the government, while another 8.2 million people (25.2%) live in areas that are contested.119 According to USFOR-A, the NATO-led Resolute Support (RS) mission determines district status by assessing five indicators of stability: governance, security, infrastructure, economy, and communications.120 USFOR-A identified the regions/provinces with the largest percentage of insurgent- controlled or -influenced districts as Uruzgan Province, with four of its six districts under insurgent control or influence (a one-district improvement since last quarter), and Helmand with nine of 14 districts under insurgent control or influence (a one-district decline since last quarter). The region with the most districts under insurgent control or influence is centered on northeastern Helmand Province and northwestern Kandahar Province, and includes the Helmand/Kandahar border area, Uruzgan Province, and northwestern Zabul. This region alone accounts for one third of the 45 districts currently under insurgent control or influence.121

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U.S. FORCES IN AFGHANISTAN DOD reported 8,300 U.S. forces serving in Afghanistan as part of Operation Freedom’s Sentinel (OFS) this quarter.122 Most are assigned to support the NATO RS mission to train, advise, and assist Afghan security forces. That mission consisted of 6,941 U.S. military personnel and 6,518 from 39 NATO allies and non-NATO partners, totaling 13,459 as of March 2017.123 The remaining U.S. military personnel in Afghanistan conduct counterterror operations under OFS. Between the start of OFS on January 1, 2015, through March 30, 2017, 19 U.S. military personnel were killed in action, in addition to 13 non-hostile deaths, for a total of 33 U.S. military deaths. During this period, 161 U.S. military personnel assigned to OFS were wounded in action.124 RS reported one additional fatality on April 8, when a U.S. Special Forces soldier died from wounds sustained in combat while conducting counter-IS-K operations with Afghan forces in Nangarhar Province.125 Insider Attacks From January 1, 2017, through February 24, 2017, there was one attack in which ANDSF personnel turned weapons on U.S. or allied military personnel. DOD reported no U.S. casualties from this insider attack.126 International media outlets reported an additional possible insider attack on March 19 at Camp Shorab in Helmand, where an Afghan Special Forces guard allegedly opened fire on three U.S. soldiers. According to these reports, the Afghan guard was killed and the three U.S. soldiers were wounded, though not critically. Pentagon officials told reporters that the incident is currently under investigation to assess the MOD claim that the guard accidentally shot the U.S. personnel.127 From January 1, 2017, through February 24, 2017, there were 12 insider attacks in which ANDSF personnel turned on fellow ANDSF personnel. These attacks killed 12 Afghan personnel and wounded eight.128 USFOR-A noted that the above figures on U.S. and ANDSF insider attacks and casualties are based on operational reporting and may differ from the official figures from the Afghan government or its ministries.129 Updates in Developing the Essential Functions of the ANDSF, MOD, and MOI Key areas of the RS mission are organized under eight Essential Functions (EF) that train, advise, and assist (TAA) their Afghan counterparts. The highlights of each function reported to SIGAR this quarter include: • EF-1 (Multi-Year Budgeting and Execution): The MOD’s end of FY 1396 (2017) budget execution was reported at 86%, the highest execution rate in the Afghan government and the best result MOD has ever achieved. EF-1 advisors are currently assisting the MOD and MOI with their FY 1397 budget cycle. The ANA Trust Fund Board approved

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the 2017 Implementation Plan, which encompasses $390.4 million in projects supported by 32 donor nations.130 • EF-2 (Transparency, Accountability, and Oversight): The implementation of counter and anticorruption initiatives is not progressing as expected in the MOI and MOD, though, according to CSTC-A, ammunition and fuel-reporting processes have improved significantly. MOD reversed its previous decision to keep asset declarations in-house and turned over its leaders’ asset declarations to the High Office of Oversight and Anti-Corruption (HOOAC). So far, 190 asset declarations have been turned over. Additionally, 19 of 21 of the new zone-level inspector general (IG) officers have reported for duty, an increase of two since last quarter. The final two are awaiting approval by the lead IG. The officers have begun to submit reports but advisors have not yet evaluated them.131 • EF-3 (Civilian Governance of Afghan Security Institutions): After the Anti-Corruption Justice Center (ACJC) became operational in November 2016 it has prosecuted five major corruption cases, according to CSTC-A. Those prosecuted included two major generals, one from the Attorney General’s Office and one from MOI. Two training sessions for ACJC prosecutors and Major Crimes Task Force (MCTF) investigators were held at Camp RS in Kabul. This quarter the number of gross violations of human rights (GVHR) cases identified by the MOD decreased from 16 to nine, and the number of MOI cases increased from 30 to 33. Investigations were completed for seven of the MOD and 11 of the MOI cases. MOD/MOI GVHRs stem from alleged extra-judicial killings of captured or wounded enemy fighters, alleged assault or torture of captured enemy fighters, and alleged cases of rape.132 • EF-4 (Force Generation): In the past three months, 250 female students graduated from a police academy in Turkey. They will be assigned to police districts upon completion of follow-on training at the ANP Academy (ANPA). The Training General Command has created a literacy plan to sustain Afghan teaching capabilities. Annual training plans have been created at the ANP Staff College, Criminal Investigation Division training school, and ANPA. As of January 19, 2017, only 2.6% of active ANP personnel were untrained.133 • EF-5 (Sustainment): In February 2017, CSTC-A approved the MOD’s request to demilitarize 70 vehicles from the 201st, 203rd, and 205th Corps. The Afghan Automated Information Management team conducted the first receipt and transfer of ammunition into the CoreIMS electronic system, part of a new process to improve tracking in the supply chain. MOD approved a revised ammunition policy which creates a national-level reserve. Implementing this policy will be an ongoing focus of TAA efforts. Expeditionary sustainment advisory teams made assessments on the 209th, 215th, and 205th Corps. The

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next round of assessments will cover all ANA corps’ Forward Support Depots, the 111th Capital Division, and ANP zones’ Regional Logistics Five Strategic Goals of the Minister of Centers beginning in March 2017.134 Interior Affairs • EF-6 (Strategy and Policy, Planning, Resourcing, and Execution): According to the RS mission, ANDSF capabilities have improved slightly, Goal 1: Strengthen public order and security as have the planning capabilities of the General Staff and Deputy Minister and prevent and combat destructive and of Security. Of the five strategic goals for the MOI, CSTC-A reported riotous activities progress on Goal 1, which they said had been difficult because the Goal 2: Enforce the rule of law and the ANA employs ANP in defensive operations that prevent the ANP from fight against crimes including narcotics developing law-enforcement skills, and on Goal 2, which saw gains in and corruption fighting corruption, but limited progress in combating illicit narcotics.135 • EF-7 (Intelligence): As of February 25, 2017, the total ASFF funding Goal 3: Strengthen strategic management used for ANA intelligence, surveillance, and reconnaissance (ISR) and communications systems through institutional development, respect programs was $728 million, including $468 million for ISR systems, human rights and gender, and implement $157 million for ISR system support, $83 million for ISR infrastructure, structural reforms and $20 million for ISR infrastructure support. MOI has established a 24-hour intelligence cell at the National Police Coordination Center Goal 4: Improve professionalism and to enhance collection and dissemination of intelligence. In addition, a civilianization in the Ministry of Interior, civilian casualty avoidance database is being set up, which is similar provide quality security services to the to the Coalition forces’ No Strike List. The MOD’s National Military public, and strengthen public trust toward Intelligence Center has also begun exploiting social media as an the police 136 intelligence source. Goal 5: Improve the quality and • EF-8 (Strategic Communications): As of February 25, 2017, senior effectiveness of infrastructure, resources, spokesperson positions in the Strategic Communications Office of and support services to the MOI the Afghan Presidential Palace remained vacant. Overall, the Afghan government continued to improve its communication coordination at Source: USFOR-A, response to SIGAR data call, 11/26/2016. the national level and made progress towards developing systems for publicizing government successes and delegitimizing insurgent groups. MOD demonstrated increased capability in psychological operations. ANA corps demonstrated improvement in conducting media operations independent of the MOD, although corps commanders remain uncertain about engaging with the media without direction from Kabul. The 209th Corps successfully synchronized messaging between the corps command and the provincial government.137 • Gender Office: The Gender Office reported that a $3.8 million Gender Occupational Opportunity Development (GOOD) contract was awarded on February 1, 2017. GOOD is expected to provide literacy, English- language skills, computer skills, and office-management courses to women in the ANDSF. Together with EF-1, the Gender Office received approval for women’s dormitories at the Air Force Academy for 40 cadets and 10 staff at a cost of $2 million. EF-4 and the Gender Office are working with MOD to vacate women from male-only positions and vice-versa to permit recruitment of women to appropriate positions and promotion tracks.138

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HELMAND’S EMBATTLED 215TH CORPS

Since the United States and its Coalition partners offi- The Marines fought off insurgent offensives alongside cially handed over security responsibility to the Afghan the 215th Corps throughout 2011 and 2012, enabling National Defense and Security Forces (ANDSF) in them to build up that corps, pacify much of the region, January 2015, the Afghan National Army’s (ANA) 215th and improve socioeconomic conditions for locals. “Maiwand” Corps has been responsible for protecting During the Marines’ drawdown from 2012 through 2014, Helmand Province. Helmand has also been the focal in preparation for Afghan forces taking responsibility point of the Taliban’s campaign against the ANDSF.139 for the province’s security, Taliban fighting ramped up. Helmand has strategic importance as one of the two However, as the Marines departed Helmand, the last principal opium-producing regions in Afghanistan. The Marine commander there believed the Afghans could commander of Resolute Support (RS) and U.S. forces handle the fight on their own.149 The Marines handed off in Afghanistan, General John W. Nicholson Jr., has char- advising of the 215th Corps to U.S. Army’s Task Force acterized the Taliban as a “narco-insurgency” which (TF) Forge—which started as a seven-man advisory depends on opium trafficking for 60% of its funding.140 team in 2015 but now includes 600 soldiers, civilians Northern Helmand is also home to the Kajaki Dam, and contractors150 which helps provide power to the southern provinces.141 The pattern of Taliban operations in Helmand Helmand borders Kandahar and Uruzgan provinces, as has changed noticeably since the handover to the well as Pakistani Baluchistan, from which the Taliban Afghans. Traditionally, winter brought a tempo- funnels supplies and fighters across the southern desert rary break in fighting as both insurgent and ANDSF into the Helmand River Valley.142 forces regrouped. However both this winter and win- In Helmand, the 215th Corps has faced “some of the ter 2015–2016 saw sustained Taliban campaigns in heaviest fighting in Afghanistan.”143 Brigadier General Helmand.151 Helmand’s winters are milder than most Charles Cleveland, the RS deputy chief of staff for com- of Afghanistan and do not force the suspension of munications, described their difficulties as the greatest combat operations.152 of any ANA Corps in the past year.144 The 215th has been particularly bedeviled by Helmand was the scene of intense fighting well before poor leadership and corruption. In December 2015, the handover to the ANDSF. The security of Helmand Mohammad Moein Faqir was appointed command- was a UK responsibility from 2006 to 2009, when British ing general of the 215th as part of an effort to address forces struggled to contain a strengthening Taliban “incompetence, corruption and ineffectiveness,” which insurgency. By 2009, the Taliban had nearly complete resulted in the replacement of many commanders and control of the province and “essentially encircled” the staff officers.153 This restructuring followed allegations capital of Lashkar Gah.145 In mid-2009, U.S. Marines were by local provincial officials accusing the corps leader- sent to Helmand as reinforcements, but Taliban forces in ship of permitting “ghost” troops to proliferate the rolls the province complicated efforts to keep districts clear to such an extent that more than half the paper strength of insurgents and maintain security.146 Intense fighting of some kandaks (battalions) did not exist in reality.154 continued in the province through 2011, requiring the In January 2016, an RS spokesperson hailed Faqir as first deployment of American battle tanks in Afghanistan “personally invested in turning around” the 215th and to counter the pervasive threat of IEDs.147 Between restoring its fighting capability.155 October 2010 and March 2011, U.S. Marines in Sangin But in a significant crackdown on corruption by the District sustained the heaviest losses of any Coalition Afghan government, General Faqir was relieved of com- battalion during the Afghanistan campaign.148 mand in October 2016, then arrested in March 2017 on

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lack of coordination between the 215th Corps and the neighboring 205th Corps (in Kandahar) and overreliance on Afghan special forces has hindered the 215th Corps’ operational effectiveness.165 In late March 2017, the 215th withdrew from Sangin’s district center. Sangin has long been of strategic interest in the fight for Helmand; U.S., British, and Afghan forces have suffered significant casualties there.166 Media reports at the time—citing local Afghan government and military officials—characterized the withdrawal as a strategic loss due to the Taliban overrunning the district center. However, RS and the Afghan MOD maintained that Sangin did not fall and that the ANDSF still control A U.S. Task Force Forge officer oversees winter campaign training the district. They characterized the withdrawal as a of the ANA’s 215th Corps at the Regional Military Training Center planned repositioning that included the destruction of in Helmand Province. (NATO photo by Kay M. Nissen) any buildings or equipment left behind to prevent their charges of neglect of duty and theft of supplies and food use by the Taliban.167 meant for his soldiers. Theft of supplies, such as fuel In comments provided to SIGAR, RS said “The per- purchased by the U.S. government for Afghan military ceived fall of the Sangin District Center to insurgents is vehicles, has been an ongoing concern and the subject an inaccurate and false narrative perpetrated by Taliban of many SIGAR inquiries.156 propaganda. The failure of [Afghan government] officials Brigadier General Wali Mohammad Ahmadzai, former in Helmand Province to proactively articulate to the commander of the 2nd Brigade, 201st “Selab” Corps local and international media that ANDSF were reposi- in Kunar Province, assumed command of the 215th in tioning to the newly designated district center directly October 2016.157 Under Ahmadzai’s command, the 215th contributed [to] insurgent propaganda.” According to succeeded in driving back the October Taliban offensive RS, the decision to reposition forces two kilometers against Lashkar Gah, albeit with heavy casualties.158 south of the original position was planned by senior pro- During this phase, General Ahmadzai began pulling back vincial leaders based on several factors, most notably 215th units from other districts to Lashkar Gah, aban- that by late 2016 the local population had been displaced doning indefensible outlying areas.159 from the central part of Sangin “severely limiting access Media reports have continued to describe Lashkar of the populace to district governance.” RS character- Gah as “surrounded” and “practically besieged” by ized the withdrawal as “a public information failure” Taliban forces for more than a year;160 although DOD which gave the impression “of military withdrawal and has at times disputed such characterizations.161 During insurgent success” rather than “the repositioning of the the 2016 fall campaign, Lashkar Gah was one of four district government to serve its citizens.” RS also noted provincial capitals targeted in coordinated Taliban that an Afghan kandak of 700 personnel is expected to offensives.162 On October 13, this offensive compelled take up operations in Sangin in late April 2017.”168 the 215th to pull out of Chah-e-Anjir on the outskirts of Force regeneration of the 215th is again the “center- the city in order to concentrate their remaining forces piece” of this winter’s campaign in order to improve the to defend the city proper; the ANA reportedly sustained corps’ operational readiness.169 According to CSTC-A, severe casualties in the withdrawal.163 Afghan comman- as of January 2017, the 215th’s operational readiness dos and U.S. airstrikes were deployed to support the rate was the lowest in the ANA at 33%—the only corps 215th and, by October 16, the ANA had retaken control below 50% readiness. As the corps taking the brunt of of the capital.164 DOD reported in December 2016 that a insurgent offensives, the 215th was projected to reach

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 93 QUARTERLY HIGHLIGHT

Former 215th Corps Commander General Moein Faqir, before his Current 215th Corps Commander General Wali Mohammad March 2017 arrest on corruption charges. (U.S. Army photo by Ahmadzai in his office at the corps’ headquarters in Helmand Specialist Nikayla Shodeen) Province. (NATO photo by Kay M. Nissen)

50%–60% readiness in time for the spring campaign.170 the spring and summer insurgent offensives, six kan- In February 2017, CSTC-A also reported that the 215th daks were withdrawn from the frontlines to re-train Corps’ operational readiness is hindered by logistical dif- and re-equip.175 U.S. forces have consistently provided ficulties, including insufficient warehouse workers and advice and assistance to the 215th on operational mechanics.171 TF Forge explained that an underperform- priorities, including the effective use of attack helicop- ing supply depot commander had exacerbated these ters, improving equipment readiness, and enhancing problems but was replaced in February 2017, producing ANA-ANP coordination.176 In addition to advisory a “steady improvement in logistical matters.”172 assistance, TF Forge can provide battlefield support According to USFOR-A, General Ahmadzai has been to the 215th in extreme circumstances, as it did during personally participating in the regeneration effort, a level the August 2015 operation to retake Musa Qala dis- of engagement described as “fundamentally different” trict center, and again in the October 2016 defense of from previous corps commanders and a positive sign.173 Lashkar Gah.177 TF Forge also noted that despite the enemy’s continued In the next few months, TF Forge will be rotating out offensives in the winter months, General Ahmadzai has and replaced by Task Force Southwest, comprised pri- been committed to maintaining the force-regeneration marily of 300 U.S. Marines that will continue TF Forge’s effort while also fighting the enemy with forces already mission supporting the 215th’s operational advising and in the field. Additionally, General Ahmadzai is reportedly force regeneration. The U.S. military hopes that draw- in the process of implementing a merit-based leader- ing on the Marines’ considerable experience in Helmand selection process to address the recurring problems with will prove a turning point for the 215th Corps. As Major leadership and corruption in the corps.174 General Richard Kaiser, commander of CSTC-A, said TF Forge has done much in the last year to bolster in February, TF Southwest’s “operational history [in the 215th Corps. According to DOD, when resetting Helmand] will surely be a force multiplier to the suc- the force during the first half of 2016 to gear up for cess of the overall mission.”178

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ANDSF ELEMENTS DEMONSTRATED MODEST IMPROVEMENTS OVER WINTER MONTHS According to USFOR-A, the ANDSF are generally performing better than at TABLE 3.7 the same point last year, especially in the areas of addressing corruption, COMPARISON OF U.S. AND use of the ASSF, operational planning for the 2017 campaign, and opera- AFGHAN ARMY TERMINOLOGY tional focus. The ANP’s development continues to lag behind the ANA in United States Afghan Afghan Size areas such as operational reporting and unit-level situational awareness.179 Corps Corps 14,000–22,000 With the exception of Afghan special operations and aviation units, Division Division* 8,500 and during periods when tactical units return to base for re-equipping and Brigade Brigade 4,000 retraining with U.S. advisor assistance, USFOR-A says U.S. advisors have Battalion Kandak 670 little or no direct contact with ANDSF units below ANA corps- and ANP Company Tolay 80 zone-headquarters levels. General Nicholson noted in his Senate testimony Note: *The ANA has one independent division, the 111th in February that an increase in troops and expanded authorities would Capital Division. better enable U.S. forces in Afghanistan to provide critical advising and oper- Source: ISAF/SFA, RS Security Force Assistance Guide 3.1, ational support to the ANDSF below the corps level.180 On a case-specific pp. 44, A-5, 7/1/2014; CSTC-A, response to SIGAR data call, 1/13/2016; Global Security, “Afghan National Army (ANA) - basis, RS currently deploys expeditionary advisory teams, conducts battle- Order of Battle,” accessed 4/13/2017. field visits, and participates in a key leader engagement, to advise at lower, unit-level echelons for a limited period of time. For more information on how ANA and Amercan unit terminology compares see Table 3.7. In addition to USFOR-A observations and TAA activities, advisors rely on data provided by the Afghan ministries to evaluate the operational readiness and effectiveness of the ANDSF. The consistency, comprehensiveness, and credibility of this data varies and cannot be verified by U.S. officials.181 USFOR-A said the ANDSF headquarter (HQ) elements demonstrated mixed results across the area of operations due to:182 • Training: Some corps and zone leaders are meeting expectations while others show little progress. There are units that performed poorly last quarter that have since made significant improvement. Units that have weak training programs cite high operational demand to explain their shortfall. • Reporting: The quality of ANP reporting in zone and MOI HQs is considered to be poor. Zone HQs rarely have acceptable knowledge of their subordinate units’ status. • Corruption: Some significant, positive steps against corruption have been demonstrated at the ANDSF HQ level. ANDSF HQ leadership have been speaking out against corruption. Many leaders have been prosecuted on corruption charges in both the ANA and ANP. However, corruption remains the most significant obstacle to ANDSF progress. • Overuse of the ASSF: Overuse of the ASSF remains a major problem. As of early 2017, the ASSF conducted 80% of all the ANA’s offensive operations.183 This quarter, USFOR-A reports that ANDSF HQs have dramatically improved in the use of ASSF, with RS and senior ANDSF leadership making proper use of the ASSF a priority, and ASSF misuse becoming mostly regionally isolated. While there are still notable repeat offenders, the vast majority of ASSF misuse has significantly decreased.

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• Operational Planning: ANDSF have also demonstrated capacity improvement in their ability to plan campaigns and major operations. While planning across the forces is not yet at an acceptable standard, RS advisors have noticed progress in the planning for the upcoming campaign as compared to last season’s efforts. The ANDSF are better able to identify main and supporting efforts and resources that should be allocated to support them. ANDSF staff are more focused on the plan than on airing grievances. • Conduct of Operations: As Afghanistan was in the winter season during this reporting period, the ANDSF have not been challenged as they were the prior quarter. The ANDSF have demonstrated an ability to remain focused on important operational objectives. The training the ANDSF conducted over the winter should yield significant improvements in the upcoming fighting season.

According to USFOR-A, as part of force-generation efforts over the winter campaign, the ANA successfully executed an operational readiness cycle, which is a plan that allows forces to rotate out, refit, retrain, or take leave, before returning to the fight.184 The ANP focused on small unit and individual training. While all ANA corps succeeded in achieving their first operational readiness cycle, some did so more easily than oth- Collective training: refers to training units ers. Collective training was attempted by all corps, with mixed levels of together. It typically follows a sequence of success, and RS will continue to provide TAA support to the corps’ staff to individual skills, collective skills, collective help them achieve their collective training requirements during the 2017 drills and actions, and a final collective operational campaign.185 validation event that combines all of the Corps’ and units’ situational reporting to MOD and MOI Headquarters previous training components. continues to be a challenge across the ANDSF but more so in the ANP, according to USFOR-A. Proper reporting procedures are not enforced by commanders and maintaining consistent awareness of units’ status is chal- Source: USFOR-A, response to SIGAR vetting, 4/11/2017. lenging. To improve the accountability of personnel and prevent payments to “ghost soldiers,” the MOD is conducting personnel asset inventories for all ANA corps and ensuring all soldiers are enrolled in the Afghan Human Resources Information Management System (AHRIMS), an electronic system that helps counter corruption in the personnel reporting system.186 For a more complete update about AHRIMS implementation, see page 100 of this section. USFOR-A reported that the ANDSF demonstrated improvements in their planning capabilities throughout the winter campaign’s planning efforts. While they received advice and guidance from RS, the ANDSF led the planning for the upcoming seasonal campaign. Afghan commanders clearly designated main and supporting efforts and allocated resources and enablers to weight them appropriately, with RS taking an observational role.187 USFOR-A has previously reported that the ANDSF lack a system to plan for risks to force and mission and, as a result, rely heavily on U.S. forces

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A noncomissioned officer of the ANA instructs soldiers in early March before redeploying on security operations in Helmand Province. (NATO photo by Kay M. Nissen)

to prevent strategic failure. This quarter, USFOR-A said that RS advisors to MOD and MOI are working with their Afghan counterparts to ensure that risks are considered during planning efforts. However, while the ANDSF did include risk information in their campaign briefs, there was not a notable emphasis on the topic. RS advisors continue to emphasize the importance of identifying and mitigating risks in planning engagements with their counterparts.188 Ministries of Defense and Interior Progress Toward Fiscal Year 2017 Projections The RS Essential Function directorates and the Gender Advisor Office use the Essential Function Program of Actions and Milestones (POAM) to assess the essential function capabilities of the offices in the MOD and MOI.189 The milestones are assessed using a five-tier rating system.190 The five ratings reflect the degree to which Afghan systems are in place, functioning, and being used effectively. The highest rating, “sustainable,” indicates an Afghan ministry can perform a specific function without Coalition advising or involvement.191 Milestone assessments are combined to determine the overall assessment of a department. Department assessments are then combined to determine the overall assessment of the ministry.192 As of February 23, 2017, out of 44 MOD POAM categories, four received the highest, “sustaining capability” rating, 12 were “fully effective,” and 15 were “partially effective.”193 Out of 31 MOI POAM categories, two received a “sustaining capability” rating, six were “fully effective,” and 14 were “partially effective.”194 MOD and MOI are both performing best in the area of

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sustainment. MOD is also performing well in intelligence and MOI in strategic communications. Both MOD and MOI are struggling with transparency and oversight.195 By the end of 2017, the MOD is projected to achieve 10 at the highest, “sustaining capability” rating, 19 “fully effective,” and 13 “partially effective.”196 The MOI is estimated to achieve three at the “sustaining capability” rating, 18 “fully effective,” and six “partially effective.”197 Overall these projections show an increase in expectations compared to projections from last quarter. Several U.S. officials continue to cite poor leadership in the ANDSF, including at ministry-headquarters level, as a key shortfall responsible for a range of issues plaguing the Afghan forces, from corruption to heightened casualties.198 To address poor leadership, Afghan President Ashraf Ghani has replaced many high-level ANDSF leaders, including most recently Deputy Interior Minister General Abdul Rahman Rahman. General Rahman was replaced by Major General Tariq Shah Bahrami, formerly the head of an elite police unit and director of information collection and coordination in the Afghan National Security Council.199 President Ghani also appointed the prominent former intelligence chief Amrullah Saleh as the head of the Afghan government’s new security forces reform effort as well as the High Office of Oversight and Anti- Corruption, both duties tasked with battling corruption and nepotism amongst senior Afghan government leaders.200 President Ghani’s efforts followed several incidents of corruption among high-level security-sector leaders. Most notably this quarter, Moein Faqir, the general in command of Helmand Province’s beleaguered 215th Corps who had been responsible for fighting corruption, was charged and jailed for corruption related to food and fuel theft.201 For more information on General Faqir and the 215th Corps, please see the Quarterly Highlight on page 92. ANDSF Strength As of January 20, 2017, ANDSF assigned force strength was 324,437 (not including civilians), according to USFOR-A.202 As reflected in Table 3.8, both the ANA and the ANP saw an increase in force strength. The ANA is now at 90.6% and the ANP is at 95.1% of authorized end strength, not including civilian personnel. This represents an increase of roughly four percentage points for the ANA and one point for the ANP since last quarter.203 The January 2017 ANDSF assigned-strength number without civilians reflects an increase of 3,581 personnel since last quarter, and an increase of 987 from the same period last year.204 Compared to last quarter, the ANA (including Afghan Air Force and civilians) increased by 2,761 personnel and the ANP increased by 1,468 personnel, as shown in Table 3.9.205

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TABLE 3.8

ANDSF ASSIGNED FORCE STRENGTH, JANUARY 2017 Difference Between Approved End- Assigned as of Current Assigned Difference ANDSF Component Strength Goal Target Date November 2016 % of Goal Strength and Goals (%) ANA including AAF 188,060 December 2014 170,440 90.6% (17,620) (9.4%) ANA Civilians including AAF Civilians 8,474 - 7,271 85.8% (1,203) (14.2%) ANA + AAF Total 196,534 177,711 90.4% (18,823) (9.6%) Afghan National Police* 161,977 February 2013 153,997 95.1% (7,980) (4.9%) ANDSF Total with Civilians 358,511 331,708 92.5% (26,803) (7.5%)

Note: ANDSF = Afghan National Defense and Security Forces; ANA = Afghan National Army; AAF = Afghan Air Force. *NISTA (Not In Service for Training), generally students, are now included in the above “ANP” and “Total ANDSF” figures. This quarter, there were 4,940 NISTA. Standby personnel, generally reservists, are not included.

Source: DOD, Report on Progress Toward Security and Stability in Afghanistan,12/2012, p. 56; USFOR-A, response to SIGAR data call, 1/20/2017.

TABLE 3.9

ANDSF ASSIGNED FORCE STRENGTH, FEBRUARY 2014–JANUARY 2017 2/2014 5/2014 8/2014 11/2014b ANA including AAF 184,839 177,489 171,601 169,203 ANP 153,269 152,123 153,317 156,439 Total ANDSF 338,108 329,612 324,918 325,642

2/2015 5/2015 7/2015a 10/2015a ANA including AAF 174,120 176,762 176,420 178,125 ANP 154,685 155,182 148,296 146,026 Total ANDSF 328,805 331,944 324,716 324,151

1/2016 4+5 2016c 7/2016 11/2016 ANA including AAF 179,511 171,428 176,058 174,950 ANP 146,304 148,167 148,480 147,635 Total ANDSF* 325,815 319,595 324,538 322,585

1/2017 ANA including AAF 177,711 ANP* 153,997 Total ANDSF* 331,708

Note: ANA = Afghan National Army; AAF = Afghan Air Force; ANP = Afghan National Police; ANDSF = Afghan National Defense and Security Forces. ANA and AAF numbers include civilians except for the May 2016 numbers; available data for ANP do not indicate whether civilians are included. a Total “ANA including AAF” numbers for July 2015 and October 2015 are not fully supported by the detailed numbers in the USFOR-A response to SIGAR data call; Trainee, Transient, Holdee, and Students (TTHS) may represent all or part of the unreconciled portion. b Reported November 2014 ANP number appears to double-count some Afghan Uniformed Police; actual number may be 151,272. c ANA data as of 5/20/2016; ANP data as of 4/19/2016. *NISTA (Not In Service for Training), generally students, are now included in the above “ANP” and “Total ANDSF” figures (as of 1/2017). This quarter, there were 4,940 NISTA. Prior figures do not include them. None of the figures include Standby personnel, who are generally reservists.

Source: CSTC-A response to SIGAR data calls, 3/31/2014, 7/1/2014, and 10/6/2014; RSM, response to SIGAR request for clarification, 3/14/2015; USFOR-A, response to SIGAR vetting, 4/10/2015, 7/12/2015, 1/29/2016, 4/12/2016, 10/9/2016, and 10/11/2016; USFOR-A, response to SIGAR data call, 12/28/2014, 3/24/2015, 6/29/2015, 9/11/2015, 12/14/2015, 3/4/2016, 6/3/2016, 8/30/2016, 11/20/2016, and 1/20/2017.

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ANDSF Casualties From January 1, 2017, through February 24, 2017, according to figures USFOR-A obtained from operational reporting, 807 ANDSF personnel were killed and 1,328 were wounded. Among these, 12 ANDSF service members were reported killed and eight wounded during 12 insider attacks.206 These figures are similar to those of the same period last year.207 DOD has previously reported that the majority of ANDSF casualties are the result of direct-fire attacks, with IED explosions and mine strikes accounting for much lower levels of casualties.208 USFOR-A emphasized that these ANDSF casualty figures may differ from the official figures of the Afghan government or its ministries.209 AHRIMS and APPS The ANDSF are in the process of implementing and streamlining several systems to accurately manage, pay, and track their personnel—an effort that could greatly improve protection for the U.S. funds that pay most of the ANDSF’s expenses. The Afghan Human Resource Information Management system (AHRIMS) contains data that includes the name, rank, education level, identification- card number, and current position of ANDSF personnel. AHRIMS also contains all the approved positions within the MOD and the MOI along with information such as unit, location, and duty title. The Afghan Personnel Pay System (APPS) is under development; when implemented, it will integrate AHRIMS data with compensation and payroll data to process authorizations, record unit-level time and attendance data, and calculate payroll amounts.210 In addition, the Afghan Automated Biometric Identification System (AABIS) and the ANDSF Identification Card System (ID) support the effort to link biometric records of personnel with APPS for payment of personnel. The aim is for APPS, AABIS, and ID to contain unique biometric-registration numbers: only those ANDSF members registered in AABIS will be issued an ID, and only those members registered with a linked ID will be authorized to have an APPS record for payment. The APPS will be interoperable with AABIS and ID card systems to eliminate the error-prone manual process of inputting 40-digit biometric numbers into the ID system. CSTC-A is overseeing this process to ensure interoperability so that biometrically linked ID cards can be issued to all ANDSF personnel and that APPS can generate payroll information and bank-account information for accounted-for personnel. According to CSTC-A, this structure will dramatically reduce the potential for nonexistent personnel to be entered into APPS, although it will not completely eliminate the risk of paying for such “ghost” personnel. Routine checks will still be required to determine that personnel are properly accounted for and are still actively serving in the ANDSF.211 USFOR-A reported last quarter that there were two ongoing efforts to ensure that accurate personnel data exist in AHRIMS to migrate into APPS:

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slotting, matching a person to an authorized position; and data cleans- ing, correcting and completing key personnel data.212 A Personnel Asset Inventory (PAI) was also initiated to correct the employment status of personnel retired, separated, or killed in action.213 This quarter, CSTC-A reported that the MOD’s PAI is ongoing, but did not indicate a possible completion date.214 USFOR-A also said that because the MOI has identified critical fields needing to be complete within AHRIMS, its PAI process is ongoing to ensure those fields are completed and verified. As of March 8, 2017, MOI has currently completed this for approximately 70,000 ANP (around 45% of the force) and 8,400 ALP (just under 30% of the force). USFOR-A estimates that the MOI PAI will be completed on or before July 30, 2017, at which point integration of AHRIMS data to APPS can com- mence.215 In vetting comments, USFOR-A projected that the transition from to APPS for both the MOI and MOD would occur before the end of 2017.216 The 209th Corps’ biometric enrollment process under way in Mazar-e Sharif in January. (SIGAR photo) “Ghost” Personnel In January 2017, U.S. media outlets reported that 30,000 ghost personnel have been identified within the ANA. As a result, U.S. officials confirmed that as of January 1, 2017, ANDSF salaries will be paid only to those MOD and MOI personnel who are correctly registered in AHRIMS.217 SIGAR requested more detailed information this quarter from U.S. officials in order to clarify the current situation involving ghost personnel and what actions have been taken by the U.S. and Afghan governments to address the issue. USFOR-A reported that their Afghan partners are “very serious about resolving this issue” and as of March 1, 2017, MOD and MOI had properly enrolled and accounted for roughly an additional 16,000 personnel in AHRIMS in the preceding two months. USFOR-A emphasized that “a thorough and deliberate process to validate all Afghan soldiers and police is ongoing and is expected to last through late summer 2017.”218 In vetting comments, USFOR-A assessed that a significant number of reported ghost personnel are better categorized as “unverified” personnel because often these personnel are present for duty, but have not completed proper enrollment into AHRIMS and are therefore unaccounted for in the system. USFOR-A noted that efforts to increase enrollment in AHRIMS prior to the introduction of APPS, completion of the PAI process, and continued enforcement by CSTC-A, will help resolve this problem and better identify the number of actual ghost personnel.219 USFOR-A also confirmed that the U.S. will continue to disburse funds only to those ANDSF personnel they are confident are properly accounted for.220 Accordingly, when CSTC-A withheld funds for those personnel not accounted for in AHRIMS, funding decreased because the MOD and MOI could not prove the stated number of personnel on hand. USFOR-A reported that there has been approximately $15 million in cost avoidance for January and February 2017 alone, but that this amount will continue to

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change as the MOD and MOI increase the validation of the remaining soldiers and police through the ongoing PAI process.221 At this time, USFOR-A said that it could not provide valid information for the corps-level incidence of suspected ANDSF ghost personnel, which SIGAR requested in order to determine the areas of Afghanistan with the highest concentration of suspected ghosts.222 Afghan Local Police In mid-March, the ANA’s 215th Corps Afghan Local Police members, known as “guardians,” are usually local citi- and the ASSF raided a Taliban-run jail in zens selected by village elders or local leaders to protect their communities southern Helmand Province, freeing at least against insurgent attack, guard facilities, and conduct local counterin- 32 ALP personnel. surgency missions.223 While the ANP is paid via the UN Development Source: Khaama Press, “32 ALP soldiers rescued from Taliban Programme’s multilateral Law and Order Trust Fund for Afghanistan jail by Afghan Special Forces in Helmand,” 3/13/2017. (LOTFA), the ALP is paid with U.S. ASFF funding provided directly to the Afghan government.224 The ALP is overseen by the MOI, but it is not counted as part of the ANDSF’s authorized end strength.225 As of February 27, 2017, the NATO Special Operations Component Command-Afghanistan (NSOCC-A) reported that according to the ALP Staff Directorate, the ALP has 28,724 guardians, 24,537 of whom are trained, 3,167 remain untrained, and 1,020 are currently in training.226 These figures indicate an increase of 1,101 ALP personnel since November 2016, an improvement from the 954-person force reduction incurred from late August to late November. It is also an improvement in the gap between trained and untrained personnel, with an additional 672 ALP guardians trained since last quarter, another 819 currently in training, and a total decrease of 390 reported untrained personnel.227 According to NSOCC-A, MOI directs untrained personnel to attend training at the provincial training centers during the winter season, and increases training at the regional training centers in the spring (for ease of access during the fighting season).228 Consistent with advising the Afghan security forces at the ANA corps and ANP zone-headquarters level, NSOCC-A advises the ALP at the ALP staff-directorate level in Kabul and does not track ALP retention, attrition, or losses.229 However, the Afghan government reported that 100 ALP guardians were killed in action from November 2016 through January 2017, and 443 were wounded in the past four months from October 2016 through January 2017.230 Based upon the recent agreement between CSTC-A and MOI to stop funding guardians not enrolled in AHRIMS, NSOCC-A reported a reduction in their estimated U.S. funding for the ALP from $93 million last quarter to $85.4 million this quarter. NSOCC-A notes that they suspect the loss of funding for the first quarter of 2017 will incentivize the MOI to account for those ALP not registered in AHRIMS to get back U.S. funding. As such, NSOCC-A estimates that U.S. funding for the ALP in FY 2017 will be

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between $85.4 million (with no additional ALP accounted for in AHRIMS) and $91.1 million (with additional ALP accounted for in AHRIMS).231 This quarter, NSOCC-A reported continuing efforts to enroll ALP personnel in the AHRIMS in order to transition ALP salary payments to an electronic funds transfer (EFT) process and to inventory materiel. These processes are expected to help track and train ALP personnel.232 As of February 27, 2017, there are 22,145 ALP biometrically enrolled (77% of the force), 23,244 ALP enrolled in EFT (81%), and 20,250 ALP (70%) had been slotted in AHRIMS, marking modest progress since last quarter. NSOCC-A remarked that the progress made on these goals significantly contributes to the elimination of ALP ghost personnel.233 The MOI’s 1395 (2016) Bilateral Financial Commitment letter laid out clear goals for the completion of ALP registration for biometric IDs (100% of the ALP), EFT salary payments (90% of the ALP), and slotting ALP personnel in AHRIMS (95% of ALP) by December 20, 2016.234 The percent- ages indicate that the ALP still have not reached these goals. However, NSOCC-A continues to recommend no penalties, based on the efforts of the ALP Staff Directorate and the Deputy, Deputy Minister for Security to complete the requirements. CSTC-A concurred with their recommendation. As with the ANA and ANP, CSTC-A will fund salaries only for ALP guardians who are actively slotted in AHRIMS (20,250 guardians). NSOCC-A says that CSTC-A will review validated numbers every three months and provide updated funding based on validated AHRIMS personnel numbers.235 In vetting comments, NSOCC-A noted that meeting the MOI Bilateral Financial Commitment letter’s goals is particularly difficult for the ALP because they are traditionally located in very rural areas. According to NSOCC-A, there are currently 17 districts that do not have the infrastructure needed to complete AHRIMS enrollment, and 30 ALP personnel have been shot and killed while traveling to PAI locations in order to enroll in AHRIMS.236 NSOCC-A reported that there are currently no updates to the ALP district assessments. As of February 27, 2017, the ALP Staff Directorate has conducted 138 of 179 district assessments. They added that the security situation in the remaining districts did not allow the ALP Staff Directorate to complete the assessments by December 20, 2016, as anticipated. However, the MOI is conducting assessments in ANP Zone 303, and NSOCC-A is awaiting the results.237 NSOCC-A also provided an update on the status of the ALP’s equipment inventory process. As of February 26, 2017, 163 of 179 districts have been inventoried and provincial-level consolidated, manual (non-electronic) inventories were created from the compiled ALP district inventories. The ALP Staff Directorate is creating a schedule of due dates for inventories by district to begin the next round of inventories for Afghan fiscal year (FY) 1396 in order to continue the progress.238

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AFGHAN NATIONAL ARMY As of March 31, 2017, the United States had obligated $41.8 billion and disbursed $41.2 billion of ASFF funds to build, train, equip, and sustain the ANA.239 ANA Strength As of January 20, 2017, the overall assigned strength of the ANA, including the AAF but not including civilians, was 170,440 personnel.240 Marking a turn for the first time in a year, ANA strength including Afghan Air Force increased by 2,113 personnel when compared to last quarter, as shown in Table 3.9 on page 99 of this section.241 When ANA and AAF civilians are included, the ANA military strength increased by 2,761, an improvement from last quarter’s decrease of 902 personnel.242 According to USFOR-A, potential ghost personnel have not been subtracted from these strength figures because the number of ghosts is still being calculated. Ghosts are estimated using the AHRIMS (personnel management) and APPS (payment) systems, both still undergoing improvements, while a different system calculates manpower—these systems have not been reconciled.243 For more information on AHRIMS, APPS, and ghost personnel, please see pages 100–102. ANA assigned military personnel are at 90.6% of the authorized end strength, more than a four-point increase from last quarter. The number of ANA and AAF civilians is 7,971 this quarter, or 94% of authorized civilian strength.244 According to USFOR-A, the overall ANA monthly attrition rate (including the AAF) for the last quarter was: • November 2016: 2.6% • December 2016: 2.4% • January 2017: 2.9%

The 2.6% average attrition for this quarter was slightly lower (0.2 percentage points) than last quarter.245 Corps-level attrition figures are classified and will be reported in the classified annex of this report. According to DOD, attrition remains a larger problem for the ANA than for the ANP, in part because ANA soldiers enlist for limited lengths of duty and have more widespread deployments across the country, while police view their careers as longer-term endeavors.246 The ANA does not allow soldiers to serve in their home areas in order to decrease the potential for local influence. DOD observed that the policy has resulted in increased transportation costs and obstacles for soldiers attempting to take leave, contributing to soldiers going absent without leave. However, the ANP historically suffers significantly more casualties than the ANA.247 DOD has also noted that the Coalition is no longer encouraging pay incentives or salary to address retention, as they have not been shown to be effective.248

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ANA Sustainment As of March 31, 2017, the United States had obligated $18.6 billion and disbursed $18.1 billion of ASFF for ANA sustainment.249 The majority of ASFF sustainment funding is for salaries and incentive payments, but other uses include procuring items such as fuel, ammunition, organizational clothing and individual equipment, aviation sustainment, and vehicle maintenance.250 CSTC-A reported the total amount expended for all payroll and non-payroll sustainment requirements in Afghan FY 1395 (2016) was $927.3 million through December 20, 2016, a $51.2 million increase from Afghan FY 1394 (2015).251 Aside from salaries and incentives, the largest uses of sustainment funding were for fuel ($154.1 million), energy operating equipment such as generators ($21.9 million), and building sustainment ($10.7 million).252 CSTC-A reported that the funding required for ANA base salaries, bonuses, and incentives will average $531.5 million annually over the next five years.253 In vetting comments, DOD noted that these forecasted numbers are for planning purposes only and are not definitive indicators of future DOD support, which will depend on Afghan progress toward reconciliation, reducing corruption, security conditions, and other factors.254 Of the $674.8 million spent on ANA sustainment in FY 1395 through December 20, 2016, $254.7 million was spent on salaries and $420.1 million on incentive pay for ANA officers, noncommissioned officers and soldiers, civilians, and contractors.255 Funding for ANA salaries decreased slightly in FY 2016 (by roughly $20 million), while incentive pay increased by about $63 million.256 ANA Equipment and Transportation As of March 31, 2017, the United States had obligated $13.4 billion and disbursed $13.3 billion of ASFF for ANA equipment and transportation.257 Most of these funds were used to purchase vehicles, aircraft, ammunition, communication equipment, weapons, and other related equipment.258 Approximately 48% of U.S. funding in this category this quarter was for vehicles and related parts, as shown in Table 3.10 on the next page.259 The total cost of equipment and related services procured for the ANA increased by over $77.3 million since last quarter and by over $329 million in the last year.260 The vast majority of the increase in the last quarter was from an additional $58.6 million in aircraft and related equipment procurements, followed by $48 million in ammunition, and $19.5 million for vehicles and related equipment procurements.261 These figures do not include the November 2016 DOD request for $814.5 million for UH-60 Black Hawk helicopters for the Afghan Air Force, as Congress has yet to approve it.262 In terms of equipment and transportation services that have already been fielded to the ANA, the largest increase in funds since last quarter was spent on weapons ($135 million), followed by ammunition ($73 million), and

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TABLE 3.10

COST OF U.S.-FUNDED ANA EQUIPMENT, AS OF FEBRUARY 27, 2017 Remaining to Procured and Type of Equipment Procured be Procured Fielded to the ANA Vehicles $7,380,483,741 $24,352,619 $6,707,279,043 Aircraft 2,536,573,797 378,386,745 1,526,849,750 Ammunition 2,517,218,609 64,706,697 2,340,083,230 Communications 887,716,065 83,548,368 673,422,562 Other 891,923,871 18,438,982 844,254,917 Weapons 648,352,822 17,394,846 680,518,830 C-IEDs 455,211,247 1,845,520 354,803,671 Transportation Services 71,442,600 0 68,997,343 Total $15,388,922,752 $588,673,777 $13,196,209,346

Note: C-IED = Counter-improvised-explosive devices. Equipment category amounts include the cost of related spare parts. Procured and Fielded to the ANA = Title transfer of equipment is initially from the applicable U.S. Military Department/Defense Agency to CSTC-A; title to the equipment is later transferred to the MOD/ANA.

Source: CSTC-A, response to SIGAR data call, 2/27/2017. transportation services ($55.5 million).263 The biggest decrease was in communications equipment (-$72 million).264

Equipment Operational Readiness Despite having begun equipment-regeneration efforts during this year’s winter campaign, the equipment operational readiness (OR) rates for the ANA declined or stayed the same this quarter in all but one of the ANA’s six corps.265 CSTC-A calculates these OR rates by determining the ratio of fully mission-capable equipment against total authorization. However, some equipment categorized as non-mission-capable may still be serviceable for use at a static location or checkpoint.266 As of January 20, 2017, CSTC-A reported the ANA’s corps-level equipment OR rates at 62% for the 201st, 61% for the 203rd, 58% for the 205th, 80% for the 207th, 54% for the 209th, and 33% for the 215th.267 The equipment OR rates for this quarter show an average 1.2-point decline across all ANA corps when compared to October 2016.268 For the first time this quarter, CSTC-A also reported the equipment OR rates for the Afghan National Army Special Operations Command (78%) and the ANA’s 111th Capital Division, which covers Kabul Province (91%).269 The ANA corps with the best equipment OR rates are the 207th (80%), which covers western Afghanistan around the relatively stable Herat Province, followed by the 201st Corps (62%), in charge of the Panjshir Valley, Nuristan, Laghman, and Kapisa Provinces just north of Kabul.270 The 215th Corps in Helmand Province, where much of the fighting in southern Afghanistan is concentrated, continued to have the lowest equipment OR rate, 33% this quarter, followed by 54% for the 209th Corps, which covers the majority of northern Afghanistan’s provinces.271

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CSTC-A remarked that continued fighting in the south has interfered with equipment maintenance activities, keeping OR rates relatively low and static, particularly for the 215th Corps.272 They noted that additional maintenance enablers have been deployed to the “main effort corps” that shoulder most of the fighting burden (including the 215th, 209th, and 205th) in a push to increase their OR rates to 50–60% by the end of the winter campaign in preparation for the spring fighting season. They also expect all remaining corps to attain above 60% for OR rates in the same time period.273

Core Information Management System The Core Information Management System (CoreIMS) is part of the solution to address the Afghan supply-chain logistical capability gap. Since 2012, efforts have been under way to develop and implement an automated system within both ministries to replace their paper-based process for keeping track of equipment. CoreIMS is an inventory-management system that is being enhanced to better track basic items like vehicles, weapons, night-vision devices, and repair parts. The system will help allocate material and analyze usage to predict future item and budget requirements, while reducing opportunities for fraud.274 The Web-based CoreIMS is available at MOD and MOI national logistic locations, forward-support depots, and regional logistic centers.275 The goal for the system is to improve Afghan sustainment processes by providing managers and decision makers with the current status of assets.276 In addition, CSTC-A has provided advanced CoreIMS training for Afghan logistic specialists to train, mentor, and assist other ANA and ANP personnel in logistics operations and CoreIMS functionality.277 As of March 1, 2017, CSTC-A reports that the CoreIMS software is fully implemented and functional at both national and regional levels. CoreIMS is also expanding to better ensure accurate military materiel inventories and equipment maintenance tracking.278 CSTC-A’s main focus in completing CoreIMS implementation is reconciling the ANDSF’s physical inventory with CoreIMS inventory, as well as tracking requested parts, completed orders, and time to fulfill a supply request.279 Using this data, CoreIMS will provide a predictive-analysis capability to identify parts for re-order, eventually accounting for serial- numbered items and their maintenance records.280 To do this, CSTC-A has integrated CoreIMS with the Security Cooperation Information Portal (SCIP), a U.S. database of the sale and provision of U.S. military materials, services, and training to foreign countries and international organizations. CSTC-A emphasized that this process would save the time and resources of ANDSF procurement personnel, decrease human error, and significantly improve order and asset visibility.281 The SCIP integration process is another process that allows for the recording of materiel transferred between ANDSF warehouses and depots,

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creating a notice for the receiving site to expect the materiel. CSTC-A believes that SCIP integration of weapons and ammunition data into a “vir- tual depot” on CoreIMS while leveraging the ability to transfer weapons and ammunition to Afghanistan’s national storage depots will provide 100% visibility of weapons and ammunition being provided to the ANA and ANP.282 This quarter, CSTC-A reports that both the CoreIMS-SCIP integration and the Transfer Functionality are also completely implemented. They said the implementation of the two processes allows CSTC-A to have accurate data on materiel transferred to the ANDSF so distribution and time involved can be tracked down to the regional level.283 CSTC-A notes that while the ANA and ANP are both using this functionality, there are still challenges with the transfer and receipt processes within the depots. The inefficiencies are being reflected in the CoreIMS data; CSTC-A is working with the CoreIMS contractor to improve the system’s functionality and with the MOD and MOI to improve their receipt processes.284 ANA Infrastructure As of March 31, 2017, the United States had obligated $5.9 billion and disbursed $5.8 billion of ASFF for ANA infrastructure projects.285 As of February 28, 2017, the United States had completed 392 infrastructure projects valued at $5.2 billion, with another 26 ongoing projects valued at $144.9 million, according to CSTC-A.286 Two projects valued at $718,603 were completed this quarter, including the 209th Corps Regional Logistics Supply Command at Mazar-e Sharif ($687,358) and the 207th Corps Regional Logistics Supply Command at Herat ($31,245).287 The largest ongoing ANA infrastructure projects are the same as last quarter: the second phase of the Marshal Fahim National Defense University (MFNDU) in Kabul (with an estimated cost of $72.5 million) to be completed in December 2017, a Northern Electrical Interconnect (NEI) substation project in Balkh Province ($27.7 million) to be completed in February 2019, and an NEI substation in Kunduz ($9.5 million) to be completed in May 2018.288 Three contracts with a total value of $2.4 million were awarded this Women’s Participation Program: An quarter. They were a $1.5 million Women’s Participation Program project initiative that seeks to advance and building facilities for women’s use at the new Hamid Karzai International promote women’s participation in Airport’s AAF base, a $828,284 taxiway repair for A-29 Super Tucano air- Afghan security institutions. The program craft at the AAF base in Mazar-e Sharif, and security upgrades to MFNDU’s promotes safe and secure facilities, proper Kabul campus.289 equipment, training, and opportunities for An additional 24 infrastructure projects valued at a total of $488 million women to increase female membership are currently in the planning phase: seven Kabul National Military Hospital within the ANDSF. projects ($321 million), four Afghan Electrical Interconnect projects ($26.8 million), five ANASOC projects ($16.8 million), and five AAF projects ($5.3 million). The remaining projects, valued at around $118 million,

Source: OSD-P, response to SIGAR vetting, 4/15/2016. comprise other ANA sustainment projects supporting the new MOD headquarters and other security facilities.290

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CSTC-A reported that several infrastructure-related train, advise, and assist (TAA) activities are ongoing. CSTC-A’s MOD infrastructure advisors are remain engaged in engineering TAA for Kabul’s Construction and Property Management Department (CPMD) headquarters, which was established to provide engineering and facility maintenance for the MOD. The CSTC-A advisors work with CPMD leadership and ANA facility engineers to increase their capabilities and capacity to operate, maintain, and sustain infrastructure.291 CSTC-A also continued the facility-maintenance training program, which trains ANDSF facility personnel in essential trades and skills for operating and maintaining power plants, HVAC systems, water treatment plants, and waste-water treatment plants, (as well as for performing quality control for such work). Training was offered at multiple ANA and ANP locations in Kabul and at regional headquarters. During the last quarter, 371 students were trained in classes including topics such as basic HVAC (133 students), basic waste-water treatment plant operations (72 students), and basic water-treatment-plant operations (41 students).292 ANA and MOD Training and Operations As of March 31, 2017, the United States had obligated and disbursed $3.9 billion of ASFF for ANA, AAF, and MOD training and operations.293 The largest MOD training projects are multiyear contracts that include an $80.9 million project to train AAF pilots, another $41.8 million project for out-of-country training for AAF pilots, and a $65.3 million project to train Afghan special forces. There are two additional training programs for the ANA that cost $18.3 million each.294 Afghan Air Force As of January 20, 2017, the overall assigned strength of the AAF including civilians was 8,389 personnel. This reflects a 477-person increase since last quarter, and a 1,253-person increase from the same reporting period last year.295 As of February 28, 2017, the United States has appropriated approximately $5.2 billion to support and develop the AAF since FY 2010, with roughly $1.3 billion of it requested in FY 2017.296 CSTC-A notes that the FY 2017 figure includes DOD’s recent request to Congress for $814.5 million to fund the Afghan Aviation Transition Plan (AATP), which will replace the AAF’s aging, Russian-made Mi-17 fleet with refurbished, U.S.-made UH-60 Black Hawk helicopters procured from U.S. Army stocks.297 As the AATP is a large new investment in Afghanistan’s aviation future, the FY 2017 funding requested is about 2.4 times the average amount requested in the seven prior years of U.S. funding requests for the AAF.298 Since FY 2010, just over $3.2 billion has been obligated for the AAF, with roughly $231 million of FY 2017 funds obligated as of February 28, 2017.299

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The majority of the funding obligated since FY 2010 has been designated for sustainment items, which account for 47.9% of obligated funds, followed by equipment and aircraft at 35.6%, a percentage that will increase substantially if the funding request for the AATP is approved and those funds are obligated.300 The AAF’s current inventory of aircraft includes:301 • 4 Mi-35 helicopters • 46 Mi-17 helicopters (18 unusable) • 26 MD-530 helicopters (one less since last quarter) • 24 C-208 utility airplanes • 4 C-130 transport airplanes (two unusable) • 19 A-29 light attack airplanes (12 are currently in Afghanistan and seven are in the United States supporting AAF pilot training)

As of April 11, 2017, 18 Mi-17s and two C-130 are undergoing overhaul or heavy repair. One MD-530 was lost since last quarter after crashing due to a mechanical failure. It was destroyed to prevent its falling into insurgent possession. One A-29 crashed in the United States in March.302 In vetting comments, DOD noted that they do not fund any of the costs for the Mi-35 helicopters; under current sanctions, they fund only sustainment for the Mi-17 variant. Sanctions notwithstanding, DOD would not fund the cost of the Mi-35s because the A-29s were intended to replace them.303 The eight A-29 Super Tucano light attack aircraft are the newest addition to the AAF fleet and have already proven to be valuable assets, with USFOR-A characterizing their impact as being “immediate . . . at both the tactical and strategic levels.”304 Over the next two years, the AAF will receive seven more A-29s once their pilots complete their training at Moody AFB in the United States and operational weapons testing and cockpit upgrades are completed. According to USFOR-A, four additional A-29s were delivered to Afghanistan in March, bringing the total in theater to 12.305 Last quarter, General Nicholson said that the AAF are now conducting most of the ANA escort and resupply missions that U.S. or Coalition forces once performed exclusively.306 He continued his praise for the AAF in his February testimony before the Senate Armed Services Committee, hailing the force as a “critical” offensive advantage against the Taliban and noted their “rapidly gaining capability.” According to General Nicholson, the AAF’s first ground-attack aircraft entered the fight in April; he also cited the progress made integrating intelligence surveillance and reconnaissance assets into their new targeting processes.307

AAF Operational Readiness Rates Exceeding Goals Given the increasing U.S. and Afghan emphasis on investing in the AAF, SIGAR asked USFOR-A to provide information regarding the AAF’s operations, flight hours, mission capability rate, recommended utilization

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AAF pilots fly A-29 Super Tucanos over Afghanistan during a late-March training mission in preparation for the upcoming spring campaign. (U.S. Air Force photo by Senior Airman Jordan Castelan)

rates, and mission-capability achievement benchmarks for each of its active airframes. According to USFOR-A, the AAF flew 6,143 sorties from November 2016 through February 21, 2017, 47% of which (2,892) were flown in December 2016.308 USFOR-A reports that from late November to late February, all but one of its airframes are above their operational readiness goals: the C-208’s OR is at 87.4% against an 80% goal, the C-130’s OR is at 62.8% against a 50% goal, and the A-29’s OR is at 84.5% against an 80% goal.309 USFOR-A noted that the MD-530’s OR is calculated differently from the other airframes in AAF inventory and is, therefore, not comparable.310 Based on USFOR-A’s assessment, the only AAF airframe that faces strain and overutilization is the Mi-17, which is reported at only 57.4% OR against a 70% goal over the same period. This is not surprising, as the AAF’s Mi-17s flew the most missions by far in the last four months—3,281 sorties—which account for 53.4% of the total number of sorties flown by all airframes during that period.311 Senior DOD officials have lobbied Congress to approve funding for the AATP to steadily replace the Mi-17s with recently refurbished UH-60s and thereby improve the AAF’s overall operational readiness and reduce capability gaps.312

Personnel Capability SIGAR asked USFOR-A to provide information regarding how many fully mission-qualified crew members the AAF has on each of its airframes, and

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what qualifies them as fully mission qualified or certified mission ready (CMR). USFOR-A responded:313 • C-130: eight total pilots (five mission pilots and three instructor pilots), five flight engineers, and eight loadmasters are CMR. C-130 pilots, flight engineers, and loadmasters are trained on an U.S. Air Force formal academic course. Upon completion of the course, they undergo a formal flight evaluation on all mission areas. After a successful flight evaluation, they must complete the C-130 Local Area Orientation (LAO), which consists of five flights and three ground training (GT) sessions. The LAO is approximately 25 hours of training. After this, the Afghans certify the crew members into their position. • C-208: 42 total pilots (31 mission pilots and 11 instructor pilots) are CMR. Most C-208 pilots receive their initial aircraft training during Afghan Undergraduate Flight Training, in either the Czech Republic or UAE by contractor-led instruction. They then undergo LAO training (similar to C-130) once they arrive at their unit, either in Kabul, Kandahar, or Shindand. The LAO consists of four GTs, two simulators, and six flights which covers the airlift mission and additional aircraft training. The LAO is approximately 56 hours of training. After LAO and instrument procedures training is complete, they take a flight evaluation and are awarded CMR status and certificates from their Afghan squadron commander. • A-29: 12 total pilots (10 mission pilots and two instructor pilots) are CMR. AAF A-29 pilots are trained in the United States at Moody AFB. They arrive in Afghanistan as either a flight lead or a wingman depending on their demonstrated skill set. Once arriving in theater, the A-29 pilots will go through a 14–16 ride LAO and a CMR checkout, which consists of academics, simulator instruction, and four phases of flight training. CMR certification is currently done by U.S. advisors, but USFOR-A reports that it will assess the new AAF instructor pilots’ ability to conduct CMR certification throughout 2017. • MD-530: 36 total pilots (31 mission pilots and five instructor pilots) are CMR. The MD-530 mission-ready checkout begins with one week of local area and aircraft academics introducing the pilot to the MD-530, as the training they receive out of country is on the MD-500. This is followed by two phases of proficiency-based flight training. The AAF pilot performs co-pilot duties during all phases of training. Because the flight training is proficiency based, the length of the program can be from three to five weeks in total in Kabul. After approximately one year of co-pilot duties, AAF pilots may be recommended to become mission pilots, which takes approximately an additional five to six weeks. • Mi-17: 68 total pilots (33 pilots and 35 instructor pilots), 27 flight engineers, and 54 crew chiefs are CMR. USFOR-A reported that AAF personnel training on Mi-17s (Russian-made) go through an entirely organic Afghan mission-ready training process, due to U.S.

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sanctions on Russia. The exception to this is training on night vision goggles, for which Coalition advisors train AAF pilots through a course similar to Coalition pilots. • Mi-35: 10 pilots are CMR. USFOR-A reported that AAF personnel training on Mi-35s (Russian-made) go through an entirely organic Afghan mission-ready training process, due to U.S. sanctions on Russia. They also noted that the Afghans have sought to keep Mi-35s in their inventory even though DOD intended the A-29s to be a replacement for them, with the pilots expected to transition to other platforms. The Mi-35s are not in the Plan of Record that DOD and international donors agree to fund. Given current sanctions on Russia, DOD can fund sustainment of Mi-17 helicopters, but not Mi-35s.314 The Special Mission Wing The Special Missions Wing (SMW) is the aviation branch of the MOD’s Afghan Special Security Forces (ASSF) that provides aviation support to Afghanistan’s counternarcotics, counterterrorism, and special operations forces.315 Two SMW squadrons are located in Kabul, one in Kandahar Airfield, and one in Mazar-e Sharif, providing the ASSF with operational reach across Afghanistan.316 The night-vision-capable SMW provides all the Afghan special forces’ helicopter support.317 The two main funding sources for the SMW are the ASFF and the DOD–Counternarcotics fund.318 From FY 2010 to February 18, 2017, just over $2.2 billion has been obligated for the SMW from both funds. The vast majority of the funding obligated since FY 2010 has been designated for sustainment items (46.1%) and equipment and aircraft (45.8%).319 This quarter, USFOR-A reported that the SMW’s leadership focused on collective training and crew growth during this winter’s campaign in order to be prepared for the spring fighting season. According to USFOR-A, as of mid-February, one platoon’s collective training course graduated in mid- December and a second course commenced in early January 2017. The second iteration graduated in early March 2017. By training more key crew members, USFOR-A noted that the SMW has increased qualified Mi-17 crews by 40% in the last quarter and is on track to increase the current state by another 14% by April 2017. In vetting comments, DOD reported that the SMW reached 24 night-vision-goggle-qualified Mi-17 crews, which was the goal of the winter campaign.320 SIGAR will report on the details of the SMW budget, inventory, manpower, and capabilities in a classified annex to this report.

AFGHAN NATIONAL POLICE As of March 31, 2017, the United States had obligated $20.3 billion and disbursed $19.9 billion of ASFF funds to build, train, equip, and sustain the ANP.321

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ANP Strength As of January 20, 2017, the overall assigned end strength of the ANP, including the Afghan Uniform Police (AUP), Afghan Border Police (ABP), Afghan National Civil Order Police (ANCOP), and MOI Headquarters and Institutional Support (MOI HQ & IS), was 153,997, according to USFOR-A.322 This is an increase of 1,468 ANP personnel since last quarter. The ANP are currently at 95.1% of their authorized end strength.323 Despite recent gains, from late June 2016 through late January 2017, the ANP suffered a loss of 1,492 personnel.324 Patrol personnel represent the largest component of the ANP this quarter with 70,180 members; noncommissioned officers numbered 51,166, while officer ranks stood at 27,761. The largest increase occurred within the noncommissioned officer ranks (565 new personnel) and the smallest increase within the smallest component of the ANP (426 new officers).325 ANP attrition stayed relatively stable since the last reporting period. According to USFOR-A, the overall ANP monthly attrition rate for the quarter was:326 • November 2016: 2.1% • December 2016: 1.9% • January 2017: 2.2% ANP Sustainment As of March 31, 2017, the United States had obligated $8.9 billion and disbursed $8.6 billion of ASFF for ANP sustainment.327 This includes ASFF contributions to the Law and Order Trust Fund for Afghanistan (LOTFA), which pays for ANP salaries, the largest use of sustainment funding.328 Other uses include electricity, organizational clothing and individual equipment, and vehicle fuel.329 According to CSTC-A, as of December 20, 2016, $676.7 million in U.S. and donor contributions was provided for ANP sustainment for Afghan FY 1395. Of that amount, $458.1 million was expended on ANP payroll and incentives.330 Of the payroll amount, $333 million represents the U.S. on-budget SIGAR AUDIT (through ASFF) contribution and $114.4 million represents the U.S. contribution to LOTFA for ANP salaries and the United Nations Development SIGAR released an audit this quarter Programme management fee.331 entitled Afghan National Defense In addition to LOTFA, CSTC-A has provided $51.7 million for ALP sala- and Security Forces: DOD Needs to ries and incentives (a $7.9 million increase from the $43.8 million reported Improve Management and Oversight of last quarter).332 Uniforms and Equipment that reviewed CSTC-A reported that aside from salaries, the majority of ASFF ANP sus- DOD’s procurement, maintenance, and tainment funding for Afghan FY 1395 (nearly $120.6 million) has been used oversight of organizational clothing and for vehicle fuel, which comprises 55% of expenditures.333 individual-equipment purchases for the ANDSF. For more information, see ANP Equipment and Transportation pp. 23-28 of Section 2. As of March 31, 2017, the United States had obligated and disbursed $4.5 billion of ASFF for ANP equipment and transportation.334 Most of these funds

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were procured to purchase vehicles, ammunition, weapons, and communication equipment, as shown in Table 3.11, with approximately 67% going to purchase vehicles and vehicle-related equipment.335

TABLE 3.11

COST OF U.S.-FUNDED ANP EQUIPMENT, AS OF FEBRUARY 27, 2017 Remaining to Procured and Type of Equipment Procured be Procured Fielded to the ANP Weapons $309,982,254 $1,627,691 $297,900,418 Vehiclesa 3,582,760,677 3,635,133 3,261,663,140 Communications 249,464,891 13,307,558 231,735,671 Ammunition 751,411,579 30,275,643 493,617,941 Transportation Services 78,181,320 0 73,035,507 C-IEDs 131,840,216 374,271 118,457,042 Other 243,198,496 11,166,890 129,044,281 Total $5,346,839,433 $60,387,186 $4,605,454,000

Note: C-IED = Counter-improvised explosive devices. Procured and Fielded to the ANP = Title transfer of equipment is initially from the applicable U.S. Military Department/Defense Agency to CSTC-A; title to the equipment is later transferred to the MOI/ANP. a Vehicle costs include vehicles and parts.

Source: CSTC-A, response to SIGAR data call, 2/27/17.

The net increase of the cost of equipment from last quarter was over $11 million, of which the vast majority was for ammunition.336 Last quarter, NSOCC-A reported that the General Command of Police Special Unit (GCPSU), a major directorate in the MOI that oversees all MOI special police units as well as serving as a rapid-response force, failed to submit a serial-numbered equipment inventory as required by the MOI. NSOCC-A recommended that CSTC-A impose a penalty and withhold up to 5% of GCPSU’s annual operation and maintenance budget, but following discussions between MOI and CSTC-A in November 2016, no penalty had been imposed on GCPSU for its lack of equipment accountability.337 In an update this quarter, NSOCC-A reported that GCPSU submitted their updated inventory to Coalition special operations advisors on January 30, 2017, and that no penalty was imposed. NSOCC-A said GCPSU submits updated inventory amendments to them monthly.338 ANP Infrastructure As of March 31, 2017, the United States had obligated $3.2 billion and disbursed $3.1 billion of ASFF for ANP infrastructure.339 According to CSTC-A, as of February 28, 2017, the United States had completed 744 infrastructure projects valued at $3.6 billion, with another 22 ongoing projects valued at roughly $74.8 million.340 There are 10 infrastructure projects in the planning phase worth $107.2 million, the majority of which are Women’s Participation Projects (WPP) projects.341

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Women’s barracks, day care, and training centers, like these at the Police Headquarters in Jalalabad, are under construction at many ANA and ANP bases throughout Afghanistan. (U.S. Army Corps of Engineers Photo)

The largest ongoing ANP infrastructure project this quarter is the installation of an information-technology server at the MOI Headquarters Network Operations Center in Kabul (with an estimated cost of $34 million).342 This is followed by two WPP projects: compounds for women at the Regional Training Center in Jalalabad ($7.8 million) and compounds for women at the Kabul Police Academy ($6.7 million).343 The two infrastructure projects completed this quarter were an IT connectivity project at MOI headquarters in Kabul ($1.9 million) and a WPP project for women’s facilities at the Pamir Provincial Headquarters in Mazar-e Sharif ($409,872).344 CSTC-A acknowledged this quarter that its advisors face difficulties in conducting post-award oversight, which they recognized as a vulnerability. They reported that their strategy intends to leverage a spectrum of overlapping and corroborating tools to provide construction oversight for SIGAR SPECIAL PROJECT ASFF-funded MOI on-budget construction, which include:345 • direct inspection of projects constructed on those MOI facilities which SIGAR issued an inquiry letter that secure Coalition-forces presence this quarter asking DOD for more • Coalition-forces patrols for site inspections information about its ongoing and • Persistent Threat Detection System balloon (surveillance blimp) planned infrastructure development imagery of contractor daily operations and progress projects in Afghanistan following • direct inspection, measurement, and time-stamped photographing by the call for donor countries to invest the command’s Afghan engineer subject-matter experts more in Afghanistan’s infrastructure in • sequential satellite-imagery analysis the Afghanistan National Peace and • intelligence, surveillance, and reconnaissance imagery capture Development Framework (ANPDF) for and analysis 2017 –2021. For more information, • dedicated Coalition forces overflight imagery capture and analysis please see pp. 46–47 of Section 2. • contractor quality-control-program measurement and time-stamped photograph reporting

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• MOI facility-engineer site inspection, measurement, and time-stamped photograph reporting ANP Training and Operations As of March 31, 2017, the United States had obligated and disbursed $3.7 billion of ASFF for ANP and MOI training and operations.346 As of January 19, 2017, only 2.6% of ANP personnel (not including ALP) were untrained (3,934 untrained out of 149,057 active ANP personnel), which indicates that the ANP is below the 5% untrained- personnel threshold mandated by the MOI’s 1395 Bilateral Financial Commitment Letter.347 The MOI’s largest ongoing training contracts include an $11.7 million project to develop the ANP’s human intelligence-gathering capacity, and a $10.8 million contract for training MOI advisors and mentors. According to DOD, FY 2016 training funds were used mainly for the AAF, ASSF and MOD training and advisors.348 This quarter, CSTC-A reported a number of updates on training activities related to infrastructure. CSTC-A’s infrastructure branch for the MOI consists of seven advisors who meet with MOI Facilities Department (FD) personnel at least twice a week to discuss issues and advise on solutions for all aspects of facility engineering and program management including budget planning, contract reviews, project planning and development. Training and advising often occurs more frequently, with CSTC-A advisors often calling several of their key FD counterparts to discuss procurement and other related topics.349 In order to assist the MOI FD with meeting their daily operation requirements, CSTC-A has contracted Afghan subject matter experts (SMEs) with technical skills matched to these requirements who train MOI facility engineers and complete other technical tasks. SMEs assist MOI FD daily operations by developing requirements, writing the statement of work for contracts, and executing oversight. There are 18 engineer SMEs working at MOI FD; one is working at CSTC-A as an SME program local-national officer and a Women’s Participation Program manager. Of the 70 total SMEs hired for use throughout Afghanistan, 58 are at MOI FD. Of those 58, there are 36 located within the provinces and six at the MOI’s “pillars,” which include the Afghan Uniform Police, the Afghan National Civil Order Police, the Afghan Border Police, and the Afghan Anti-Crime Police.350 CSTC-A reports that they are actively executing a program to train ANDSF facility engineers and public-works personnel in trades and skills needed to operate and maintain power plants, plumbing systems, water treatment plants, and waste-water treatment plants, as well as to perform quality control over this work. The training program is conducted with an emphasis on hands-on, on-the-job training.351

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WOMEN COMPRISE 1.4% OF ANDSF PERSONNEL This quarter, the RS Headquarters Gender Affairs Office reported 4,388 women serving in the ANDSF, a decrease of 18 personnel since last quarter.352 USFOR-A attributes the decrease to retirement and instances of absence without leave within the ANP, which was the only force to suffer female personnel attrition this quarter.353 The overall percentage of women in the ANDSF remains at 1.4%; the ANP has the highest percentage of women, 2%.354 Of the 4,388 women, 3,112 were in the ANP, 1,065 were in the ANA, 139 were in the ASSF, and 72 were in the AAF. Of the women in the ANP, ANA, and AAF, 1,266 were officers, 1,637 were noncommissioned officers, 1,246 were enlisted, and 239 were cadets.355 USFOR-A reported this quarter on how the U.S. is spending the $10 million required by the FY 2016 National Defense Authorization Act to promote the security of Afghan women. According to USFOR-A, the funds are being used to renovate facilities for women to provide additional safety measures, such as security cameras, securing existing facilities as appropriate with cipher locks on women’s restrooms, and training women in courses such as self-defense, workplace violence, and sexual harassment in the workplace. USFOR-A notes that both male and female ANDSF personnel are trained in these courses.356 On March 8, the first permanent facilities created as part of the Women’s Participation Program were opened, new barracks and a daycare facility for female ANA personnel, at Camp Shaheen in Mazar-e Sharif. However, issues have been raised recently regarding ANDSF facilities for women. This quarter, the CSTC-A audit division issued a draft audit report on the MOI’s utilization of gender facilities for women. CSTC-A inspected 18 gender-designated facilities and determined at least half were not used primarily by women. Consequently, CSTC-A questioned the effectiveness of the MOI’s gender program.357 For more information about this audit, see page 131 of this section. The RS Gender Office is also assessing the process of assigning women to ANDSF positions to best ensure seamless integration. Currently, women are assigned to ANDSF positions coded for women. The Gender Office is working to better understand which positions are open to women so that women can be recruited for those specific positions. According to RS, a clear understanding of who can be assigned to a position is necessary to recruit, properly train and allow for promotions of women in the ANA. This quarter, 88 additional positions for women were created in the ANA.358

ANDSF MEDICAL AND HEALTHCARE The total cost of ANDSF medical equipment fielded this quarter was approximately $7 million, with $27.7 million projected for medical equipment procurement for Afghan fiscal year 1396 (2017).359

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As of February 28, 2017, there were 917 physicians (a 92-person decrease from last quarter) and 2,893 other medical staff (a 159-person increase) within the ANDSF healthcare system; 351 physician positions (27.7% of those required) and 480 other medical positions (14.2%) are vacant, according to CSTC-A.360 CSTC-A reported that the renovation of the ANP Hospital (ANPH) has proceeded more slowly than expected as the Afghan government continues to investigate procurement irregularities from the previous contract. The Office of the Surgeon General (OTSG) has used the lull to identify medical equipping and outfitting requirements before the project restarts. Based on OTSG-generated requirements, the Coalition has funded a $3.7 million medical equipment package.361 The OTSG has also been working to establish 20-bed hospitals in each police zone. Currently there are three operational zone hospitals, including one in Jalalabad that recently became operational. While other zone hospitals are being established, the OTSG plans to surge medical providers from the ANPH to those zones where major security operations are under way. In addition, the OTSG has prioritized the distribution of combat lifesaver bags, first aid kits, and medic bags to the provinces ahead of expected security operations planned for the spring and summer.362 According to CSTC-A, Coalition advisors traveled with ANA Medical Command officials to the ANA military hospitals at various locations with the goal of determining the educational needs of the healthcare providers including gaps in training, and improving lines of communication, collaboration and knowledge sharing between Kabul National Military Hospital (KNMH) and the regions.363 In vetting comments, CSTC-A clarified that KNMH is the same as Sardar Daud Khan Hospital, the facility where the suspected Islamic State-Khorasan attack occurred in early March.364 CSTC-A noted that the hospital assessments found that ANA physicians are providing better-than-expected care. Afghan doctors have been receiving specialized training in countries such as India, Turkey, Germany, and the United States. CSTC-A reported that nursing staff had some deficiencies, including a lack of basic infection-control standards such as hand wash- ing and wearing personal protective equipment. They that these issues are being addressed by local coalition advisors and Afghan educators.365 MOD and Coalition advisors worked to address what CSTC-A has characterized are the “unacceptably high” killed-in-action (KIA) rates of ANDSF personnel. CSTC-A noted that while the reasons for high mortality rates can be somewhat explained by deficiencies in the medical evacuation process (due to limited availability of air assets to bring wounded personnel from the battlefield to medical facilities), improvements in point-of-injury care have been shown to significantly improve survivability for combat casualties. For this reason, CSTC-A advisors accompanied ANA medical officials to conduct refresher training courses on combat casualty care and trauma

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management for medics and nurses.366 In addition, CSTC-A reported that the ANA has begun tracking more closely the statistics for various types of casualties and forwarding that information to the KNMH. A monthly report is now published as well as a yearly summary of injuries by type, care provided, and patient outcomes.367

REMOVING UNEXPLODED ORDNANCE The Department of State’s (State) Bureau of Political-Military Affairs’ Office of Weapons Removal and Abatement (PM/WRA) manages the conventional- weapons destruction program in Afghanistan. Since FY 2002, State has provided $345.7 million in weapons-destruction and humanitarian mine- action assistance to Afghanistan. PM/WRA has two-year funding and has obligated approximately $17.3 million of FY 2016 funds.368 State directly funds six Afghan nongovernmental organizations (NGOs), three international NGOs, and one U.S. government contractor. These funds enable clearing areas contaminated by explosive remnants of war (ERW) and support clearing conventional weapons used by insurgents to construct roadside bombs and other improvised-explosive devices. As of December 31, 2016, State-funded implementing partners have cleared approximately 210 million square meters of land (approximately 81 square miles) and removed or destroyed approximately 7.8 million landmines and other ERW such as unexploded ordnance (UXO), abandoned ordnance (AO), stockpiled munitions, and homemade explosives since 2002 (see Table 3.12).369 In addition, survey and clearance are still needed on 59 firing ranges belonging to ISAF/NATO covering an area of 127.5 square kilometers (49.2 square miles). From December 2012 to June 2016, 47 hazards and a total area of 1,205.5 square kilometers (465.4 square miles) were cleared on ISAF/NATO firing ranges.370 The estimated total area of contaminated land continues to fluctuate as clearance activities reduce hazardous areas, while ongoing survey activities find new contaminated land. At the beginning of this quarter, there were 607 square kilometers (234.4 square miles) of contaminated minefields and bat- tlefields. During the quarter, nine square kilometers (3.5 square miles) were cleared, bringing the known contaminated area to 598 square kilometers (231.9 square miles) by the end of the quarter. PM/WRA defines a minefield as the area contaminated by landmines, whereas a contaminated area can include both landmines and other ERW.371 USAID, in partnership with the UN Mine Action Centre for Afghanistan (UNMACA), provides services for victims and survivors of mines and ERW, as well as for civilians affected by conflict and persons with disabilities, through the Afghan Civilian Assistance Program (ACAP). The goal of this project is to mitigate the short-term and long-term impact of conflict on civilians, including victims of mines and ERW.372

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TABLE 3.12

CONVENTIONAL WEAPONS DESTRUCTION PROGRAM METRICS, FISCAL YEARS 2010–2017 Minefields Estimated Contaminated Fiscal Year Cleared (m2) AT/AP Destroyed UXO Destroyed SAA Destroyed Fragments Cleared Area Remaining (m2)* 2010 39,337,557 13,879 663,162 1,602,267 4,339,235 650,662,000 2011 31,644,360 10,504 345,029 2,393,725 21,966,347 602,000,000 2012 46,783,527 11,830 344,363 1,058,760 22,912,702 550,000,000 2013 25,059,918 6,431 203,024 275,697 10,148,683 521,000,000 2014 22,071,212 12,397 287,331 346,484 9,415,712 511,600,000 2015 12,101,386 2,134 33,078 88,798 4,062,478 570,800,000 2016 27,856,346 6,493 6,289 91,563 9,616,485 607,600,000 2017 4,813,771 1,307 842 6,975 613,577 598,300,000 Total 209,668,077 64,975 1,883,118 5,864,269 83,075,219 598,300,000

Note: AT/AP = anti-tank/anti-personnel ordnance. UXO = unexploded ordnance. SAA = small arms ammunition. Fragments are reported because their clearance requires the same care as for other objects until their nature is determined. There are about 4,047 square meters (m2) to an acre. * Total area of contaminated land fluctuates as clearance activities reduce harzardous areas while ongoing survey identifies and adds new contaminated land in the Information Management System for Mine Action (IMSMA) database.

Source: PM/WRA, response to SIGAR data call, 3/28/2017.

UNMACA draws on its wider network under the Mine Action Programme of Afghanistan (MAPA), which consists of 50 international and national organizations, to access beneficiaries and communities. One of those organizations, the Mine Action Coordination Centre of Afghanistan (MACCA), collects casualty data on mine/ERW victims to help prioritize its clearance activities. The $30.2 million ACAP program has expended $19.6 million to date and is planned to conclude in February 2018.373 According to USAID, ACAP funding allows MACCA to expand its victim-assistance activities beyond service provision and data collection to include immediate assistance for individual survivors and their families.374 The number of deminers working in MAPA total around 9,700, of which 99% are Afghan nationals. The high number of individuals involved with demining makes Afghanistan one of the world’s largest mine action programs, with the most coverage on the ground. Less than 1% of all security-related incidents targeted the demining community since 2009.375 Between October and December 2016, MAPA reported that 1,771 civilian victims received assistance and disability support services. The total number of beneficiaries since 2007 is 426,192.376 From January to December 2016, the UN and mine action partners have provided risk education regarding mines and ERW to over 466,000 returnees from Pakistan.377

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GOVERNANCE CONTENTS

Key Issues and Events 123 U.S. Reconstruction Funding for Governance 124 Mutual Accountability Updates 124 U.S. Assistance to the Afghan Government Budget 126 National Governance 133 Subnational Governance 136 Reconciliation and Reintegration 138 Rule of Law and Anticorruption 140 Human Rights 148 Gender 151

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GOVERNANCE

KEY ISSUES AND EVENTS Throughout the quarter, the National Unity Government grappled with high-level political realignments. As the UN Secretary-General noted in March, the Afghan government faces both internal and external political challenges. He called on Afghan political elites to work together, saying “a cohesive working relationship between the President [Ashraf Ghani] and the Chief Executive [Abdullah Abdullah] will remain vital.”378 One month after Ata Mohammad Noor’s formal reappointment by President Ghani in February as governor of Balkh Province, Noor apolo- gized for having supported Ghani’s former electoral opponent, Abdullah, during the 2014 presidential elections. Noor also announced that he was no longer politically cooperating with Abdullah, saying “it is better to separate our political ways now as you [Abdullah] cannot command the support of millions.” Noor, governor of Balkh Province since 2004, but serving in an acting capacity for the past two and a half years, is chief executive of the Jamiat-e-Islami party. In January, there were reports that Noor was negotiating a separate power-sharing deal with President Ghani, causing turmoil in Jamiat-e-Islami between supporters of Abdullah and Noor.379 Later in March, Noor announced that he may resign his governorship in order to run for president.380 According to Afghan media, during a visit to Balkh Province after Noor’s announcement, President Ghani praised Noor, saying he “has always made request for the improvement of Balkh and not for himself.”381 Noor may be benefiting from the political isolation of his old opponent, First Vice President Abdul Rashid Dostum, who supported President Ghani in the 2014 election. On November 24, 2016, Dostum reportedly kidnapped and ordered the sexual assault of a political rival, a former governor of Jowzjan Province.382 Since the Afghan attorney general’s office announced an investigation on December 17, 2016, Dostum has prevented Afghan police from investigating. According to the Wall Street Journal, Dostum has barricaded himself inside his Kabul home, with Afghan officials estimating the size of his force as between 700 and 1,000 men.383 The New York Times reported that while President Ghani was away at an international security conference, First Vice President Dostum traveled

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to his office at the presidential compound with a sizable armed escort of his own and declared himself acting president until President Ghani returned. The current standoff is reminiscent of a year-long 2008 incident in which Dostum was previously accused of abuse. That incident ended when Dostum went into a self-imposed exile in Turkey. Dostum returned in 2009 to support President Hamid Karzai’s 2009 presidential bid, receiving the largely ceremo- nial title of chief of staff for the commander-in-chief of the armed forces.384 On April 17, President Ghani dismissed his representative for good governance and reform, former vice president Ahmad Zia Massoud. In response, Massoud said “If the president wants to push me out, the country will end up in another civil war.” Dostum appeared to side with the margin- alized Massoud, with one of Dostum’s representatives labeling Massoud’s removal unfair.385 Additionally, acting minister of foreign affairs and head of Jamiat-e-Islami, Salahuddin Rabbani, called for a “change to the [government] system” as agreed in the 2014 accord that led to the formation of the National Unity Government.386 Key among these terms was convening a Loya Jirga (grand assembly) to amend the Afghan constitution and consider the proposal to create the post of executive prime minister.387

U.S. RECONSTRUCTION FUNDING FOR GOVERNANCE As of March 30, 2017, the United States had provided nearly $32.3 billion to support governance and economic development in Afghanistan. Most of this funding, more than $19.4 billion, was appropriated to the Economic Support Fund (ESF) administered by the State Department (State) and the U.S. Agency for International Development (USAID).

MUTUAL ACCOUNTABILITY UPDATES At the Senior Officials Meeting (SOM) in September 2015, the international community and the Afghan government agreed to the Self-Reliance through Mutual Accountability Framework (SMAF) as a guide for their activities at least to the end of the present government’s term.388 The SMAF covers six areas: (1) improving security and political stability (with three associated indicators); (2) anticorruption, governance, rule of law, and human rights (14 indicators); (3) restoring fiscal sustainability and integrity of public finance and commercial banking (nine indicators); (4) reforming development planning and management, and ensuring citizens’ development rights (three indicators); (5) private-sector development and inclusive growth and development (four indicators); and (6) development partnerships and aid effectiveness (eight indicators).389 At the October 2016 Brussels Conference, international donors and the Afghan government also agreed to 24 new “SMART” (Specific, Measurable, Achievable, Realistic, and Time-bound) deliverables for 2017 and 2018.390

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According to the Afghan government, as of January 2017, a number of the original SMAF indicators remained in progress. For example, two provinces were governed by acting governors and nine deputy minister positions led by acting personnel (these appointments were supposed to have been made permanent by the end of 2015). While five revenue-generating ministries—finance, mines and petroleum, commerce and industries, transport and civil aviation, and communication and information technology—submitted their anticorruption plans on schedule, all remaining ministries were still developing their plans. Finally, the subnational-governance policy that was supposed to be approved by March 2016 was still being revised.391 Electoral Reform Challenges Overhauling the electoral process was a central part of the power-sharing deal brokered by the United States between President Ghani and his election rival, now Chief Executive Abdullah, after the troubled 2014 presidential elections. The September 2014 agreement that led to forming the national-unity government called for immediate establishment of a special commission for election reform. The intent was to implement reform before the next parliamentary elections—intended for 2015, but never held—and to distribute electronic identity cards to all Afghan citizens as quickly as possible.392 At the October 2016 Brussels Conference, the Afghan government agreed to take concrete steps toward electoral reform and preparations in 2017.393 USAID reported that there are a number of outstanding elections-related decisions, including an election timeline, the method for registering voters, and the mechanism for funding the election. The Afghan government is still debating the timeline for parliamentary elections. While the Independent Electoral Commission (IEC) proposed elections in early 2018, President Ghani reportedly insisted on elections in 2017. USAID, however, believes that an early 2018 election is very ambitious. Additionally, the IEC has yet to determine the voter registration method. According to USAID, the two voter registration options are: (1) revalidating existing cards plus validating new cards for new voters, and (2) issuing new voting cards for all. Finally, USAID reports that President Ghani would prefer elections funding to be on-budget (via the Afghan government budget). However, in April, donors in the Election Support Group decided to provide their elections funding via the United Nations Development Programme.394 According to the IEC, the initial cost estimate for the next parliamentary and district council elections is $120 million. As of April, the Ministry of Finance was still discussing potential financing with international donors.395 According to the UN Secretary-General, this quarter the IEC publicly reaffirmed its commitment to establishing polling center-based voter lists, in accordance with electoral law, and its spokesperson announced that electronic national identification cards will not be used for voter registration

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in upcoming elections. On February 10, the IEC spokesperson announced that parliamentary and district council elections would be held in 2018.396 In April, Chief Executive Abdullah’s office announced that parliamentary and district council elections would be held before March 21, 2018.397 According to State, there has been no progress in introducing electronic identification cards and the U.S. government is presently not a donor to this initiative.398 The EU has reportedly decided to not fund electronic identification cards that display ethnicity or nationality, according to USAID.399 Some critics contend that the term “Afghan” is politically advantageous for the Pashtun ethnic group since “Afghan” has historically been used inter- changeably with Pashtun.400 In late March, however, the head of Afghanistan’s Biometric Identity Cards Issuing Authority said the Afghan government has given him 90 days to begin issuing electronic identity cards. The initial budget of $4.2 million will be funded by the Afghan government itself. President Ghani had earlier approved a draft census law that included the word “Afghan” as the nationality and ethnicity of the card holder. The Afghan government has cited the debate around the politicized term “Afghan” as a reason for the delayed start in issuing electronic identification.401 In March, the Afghan Ministry of Justice (MOJ) announced that it had revoked the licenses of numerous political parties to prevent factionalism. Whereas there had been 110 registered political parties previously, there are now only 60.402 An MOJ spokesman later clarified that 50 of the parties had their licenses revoked because they lacked a clear agenda.403 On-budget assistance: encompasses donor funds that are aligned with Afghan government plans, included in Afghan gov- U.S. ASSISTANCE TO THE AFGHAN ernment budget documents, and included GOVERNMENT BUDGET in the budget approved by the parliament and managed by the Afghan treasury Summary of Assistance Agreements system. On-budget assistance is primarily At the Brussels Conference in October 2016, the United States and other delivered either through direct bilateral international participants confirmed their intention to provide $15.2 billion agreements between the donor and Afghan between 2017 and 2020 in support of Afghanistan’s development priori- government entities, or through multidonor ties.404 Although the United States did not commit to a specific amount, trust funds. then-Secretary of State John Kerry promised to work with Congress to pro-

405 Off-budget assistance: encompasses vide civilian assistance at or near the 2016 levels through 2020. donor funds that are excluded from the Earlier, at the 2010 Kabul Conference, the United States and other inter- Afghan national budget and not managed national donors supported an increase to 50% the proportion of civilian through Afghan government systems. development aid delivered on-budget through the Afghan government to improve governance, cut costs, and align development efforts with Afghan priorities.406 Donors, including the United States, reaffirmed this commitment at the July 2012 Tokyo Conference and again at both the December Source: SIGAR, Quarterly Report to the United States Congress, 7/30/2014, p. 130; Ministry of Finance, “Aid Management 2014 London Conference and the September 2015 SOM.407 As of December Policy for Transition and Beyond,” 12/10/2012, p. 8; State, 408 response to SIGAR vetting, 1/14/2016. 2016, USAID had not yet achieved the 50% on-budget target. At the

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TABLE 3.13

USAID ON-BUDGET PROGRAMS Special Cumulative Afghan Government Bank Total Estimated Disbursements, as Project/Trust Fund Title On-Budget Partner Account? Start Date End Date Cost ($) of 3/31/2017 ($) Bilateral Government-to-Government Projects Power Transmission Expansion and Da Afghanistan Breshna Sherkat Yes 1/1/2013 12/31/2018 $725,000,000 $130,995,837 Connectivity Project (PTEC) (DABS) Basic Education, Learning, and Training Ministry of Education (MOE) Yes 11/16/2011 6/30/2017 26,996,813 24,891,728 (BELT) - Textbooks Printing and Distribution Ministry of Communications and E-Government Resource Center (EGRC) Yes 8/28/2013 12/1/2017 3,900,000 1,205,000 Information Technology (MCIT) Strategic Communication Support to the Ministry of Finance (MOF) Unknown 7/18/2016 7/31/2017 627,833 210,986 Palace (SCSP) Multi-Donor Trust Funds Afghanistan Reconstruction Trust Fund Multiple No 3/31/2012 7/31/2019 2,700,000,000 1,575,289,080 (ARTF) (current award)* Afghanistan Infrastructure Trust Fund (AITF) Multiple No 3/7/2013 3/6/2018 153,670,184 153,000,000

Note: *USAID had a previous award to the ARTF that concluded in March 2012 and totaled $1,371,991,195 in disbursements. Cumulative disbursements from the two ARTF awards currently total $2,947,280,275.

Source: USAID, response to SIGAR data call, 4/9/2017.

October 2016 Brussels Conference, the United States and other donors committed to channel a “higher share” of their development assistance via on-budget modalities in 2017 and 2018, but did not commit to a particular percentage of their overall assistance.409 As shown in Table 3.13, USAID expects to spend $757 million on active, direct bilateral-assistance programs. It also expects to contribute $2.7 billion to the Afghanistan Reconstruction Trust Fund (ARTF) through 2020, in addition to $1.37 billion disbursed under the previous grant agreement between USAID and the World Bank. USAID has disbursed $153 million to the Afghanistan Infrastructure Trust Fund (AITF).410 The U.S. government announced in March 2015 that it intended to seek funding to support the Afghan National Defense and Security Forces (ANDSF), including the army and police, at the level of 352,000 personnel through at least 2017.411 The Department of Defense (DOD) was authorized $4.26 billion to support the ANDSF for fiscal year (FY) 2017 (though the appropriation was not finalized before this report went to press).412 At the 2012 Chicago Conference, the United States and its allies affirmed commitments to support the Afghan security forces with an estimated annual budget of $4.1 billion, to be reviewed regularly against the changing security environment.413 At the September 2014 Wales Summit, NATO allies and partners reaffirmed their commitment to financial sustainment of the ANDSF through the end of 2017. The international community pledged an additional amount of almost €1 billion, or approximately $1.29 billion, annually to sustain the ANDSF for 2015 through the end of 2017.414

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In July 2016, NATO allies and partners met in Warsaw and committed to extend the financial commitments made at the 2012 NATO Summit in Chicago. Some 30 nations renewed pledges to sustain the Afghan security forces through 2020 at or near current levels. The international community has so far pledged more than $800 million annually for 2018–2020. President Obama also pledged that he would recommend to his successor that the United States continue to seek funding for the ANDSF at or near current levels through 2020.415 As of early April, DOD had not yet finalized the agreements governing their Afghan FY 1396 (FY 1396 runs from December 22, 2016, to December 21, 2017) direct on-budget contributions to the Ministry of Defense (MOD) or Ministry of Interior (MOI).416 Civilian On-Budget Assistance USAID provides on-budget civilian assistance through (1) bilateral agreements with seven Afghan government entities and (2) contributions to two multidonor trust funds, the ARTF and the AITF.417 According to USAID, all bilateral-assistance funds are deposited in separate bank accounts established by the Ministry of Finance for each program.418 The ARTF, administered by the World Bank, provides funds to both the Afghan government’s operating and development budgets in support of Afghan government operations, policy reforms, and national-priority programs.419 The AITF, a multidonor trust fund administered by the Asian Development Bank, coordinates donor assistance for infrastructure projects in Afghanistan.420 According to USAID, the majority of on-budget funding has been and will continue to be directed through the multidonor trust funds, particularly the ARTF.421 As of January, the United States remains the largest donor to the ARTF (30.6% of actual contributions) with the next largest donor being the United Kingdom (17.4% of actual contributions).422 According to the World Bank, the ARTF is the largest single source of support for the Afghan government budget at $9.1 billion as of September 2016.423 The ARTF recurrent-cost window supports operating costs, such as Afghan government non-security salaries. The recurrent-cost window pays 16–20% of the Afghan government’s non-security operating budget.424 This quarter, the World Bank reported on the results of its monitoring agent’s review of the eligibility of Afghan government-submitted recurrent costs to be paid via the ARTF. In a review of 1,952 sample items (representing $115 million in recurrent costs), 66% of the sample recurrent costs were deemed eligible for payment. The main reasons for finding an item ineligible for payment include: missing approvals, no supporting documents, noncompliance with procurement rules, and missing documents. By comparison, the portion of Afghan government-submitted recurrent costs deemed by the monitoring agent eligible for Afghan fiscal year 1393 (December 22, 2013, to December 21, 2014) was 74.3%.425

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When reviewing recurrent costs, the World Bank’s monitoring agent selects a representative sample of Afghan government civilian payroll transactions for greater scrutiny. According to data the World Bank provided SIGAR AUDIT donors in January in response to donor concerns about “ghost teachers,” SIGAR has an ongoing audit of the monitoring agent conducted a document review on $40.5 million of the ARTF. In July 2011, SIGAR $469.3 million in Ministry of Education (MOE) payroll expenditures for found that the World Bank and the Afghan fiscal year 1393. The monitoring agent concluded that 94% of MOE Afghan government had established payroll expenses were eligible after this sample review.426 mechanisms to monitor and account Starting in 2014, the monitoring agent added physical verification of a for ARTF contributions, but that several sample of nonsecurity Afghan government employees to its review process. limitations and challenges should be The monitoring agent will notify the relevant Afghan government ministry addressed. This new audit will assess or department of the employees it intends to physically verify. Once the the extent to which the World Bank and ministry or department approves, the monitoring agent meets with the the Afghan government (1) monitor and employee. Of the 185,375 MOE staff in 1393, the monitoring agent selected account for U.S. contributions to the 3,087 teachers (representing 1.7% of all MOE employees) for physical ARTF, (2) evaluate whether ARTF-funded verification. Of this sample, 1,952 teachers (63.2%) were dropped from the projects have achieved their stated sample as they worked in areas the monitoring agent deemed too insecure goals and objectives, and (3) utilize to visit. For the 1,135 teachers located in areas the monitoring agent con- and enforce any conditionality on sidered safe enough to visit, the monitoring agent was able to verify 72% ARTF funding. teachers without issues and 28% with issues.427 According to USAID, the issues associated with physical verification include, but are not limited to, the following: employee no longer in service; the employee is on leave or absent from office; and the employee is in another place, such as a site visit for official work or abroad.428 On-Budget Assistance to the ANDSF More than 60% of total U.S. on-budget assistance goes toward the Afghan security forces requirements.429 DOD provides on-budget assistance to the Afghan government through (1) direct contributions from the Afghanistan Security Forces Fund (ASFF) to the Afghan government to fund MOD and MOI requirements, and (2) ASFF contributions to the multidonor LOTFA.430 Administered by the UNDP, LOTFA primarily funds Afghan National Police salaries and incentives.431 Direct-contribution funding is provided to the Ministry of Finance, which allots it incrementally to the MOD and MOI, as required.432 In February 2011, the Under Secretary of Defense Comptroller authorized the U.S. military’s Combined Security Transition Command–Afghanistan (CSTC-A) to provide direct contributions to the Afghanistan government from ASFF to develop ministerial capacity and capability in the areas of budget development and execution, acquisition planning, and procurement. CSTC-A administers all contributions of ASFF resources to the Afghan government to fund MOD and MOI requirements, subject to certain conditions that the ministries must meet for the use of the funds.433 CSTC-A moni- tors and formally audits the execution of those funds to assess ministerial

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capability and ensure proper controls and compliance with documented accounting procedures and provisions of the annual commitment letters.434 In December 2016, CSTC-A lost access to the Afghanistan Financial Management Information System (AFMIS) due to upgrades to the AFMIS that have caused technical challenges for CSTC-A. CSTC-A normally reviews AFMIS expenditure reports weekly to monitor the Afghan government’s utilization of on-budget security funds. As of mid-April, CSTC-A does not know when they will regain functional AFMIS access.435 In the last quarter, CSTC-A provided $188.3 million to the MOD, $110.1 million to the MOI, and $28.8 million to LOTFA.436 Most of the on-budget funds provided by CSTC-A support salaries, with limited amounts for local procurement used for services such as facility-maintenance contracts.437 According to CSTC-A, the Afghan government’s procurement process is hindering the execution of ASFF funds provided as direct contributions. As of September 2016, the execution rate was only 37%.438 CSTC-A officials believe Afghan government procurement reforms—particularly the establishment of the National Procurement Commission (NPC) that is chaired by President Ghani and reviews all operations and maintenance contracts above $300,000 and construction contracts over $1.5 million before contract award—has enforced contracting standards and reduced corruption.439 According to CSTC-A, the establishment of the NPC and associated National Procurement Authority (NPA) have improved the Afghan government’s compliance with Afghan procurement law.440 However, CSTC-A reports that corruption and ethical concerns continue to hamper MOD and MOI contracting. MOD and MOI officials have been suspended or released from duty in response to both proven as well as unsubstantiated corruption allegations. Both the MOD and MOI procurement departments have undergone complete or partial replacement of officers and employees. Additionally, the NPA has revoked the MOI’s procurement authority, meaning routine purchases are further delayed due to increased oversight.441 CSTC-A reports that new personnel have been appointed to key MOD and MOI procurement positions. These new personnel are reluctant to approve contract actions due to their lack of procurement knowledge.442 According to CSTC-A, the transition of security-related procurements from off-budget (procured by CSTC-A) to on-budget (procured by the Afghan government) has not achieved the desired results. This quarter, fuel, medical, and pharmaceutical purchases for MOD and MOI reverted to CSTC-A management. CSTC-A reports that corruption and low-quality product substitution prompted the move. CSTC-A hopes to transition these procurement responsibilities back to MOD and MOI as their capacities improve. However, DOD says continued use of DOD-procured contracts for these requirements is conceivable as part of a long-term security

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U.S. and Afghan army officials cut a ribbon marking the turnover of permanent facilities for a Women’s Participation Program barracks. (DOD photo by Michael Glasch)

cooperation relationship with Afghanistan, whether funded by ASFF or Afghan funds.443 The MOD and MOI budgets registered the largest reduc- tions in the overall national budget—over $415 million less compared to the previous year’s budget—due to the transition of fuel procurement responsibilities from the Afghan government to donor procurement.444 This quarter, the CSTC-A audit division issued a draft audit report on the MOI’s utilization of facilities for women. CSTC-A inspected 18 gender- designated facilities and determined at least half were not used primarily by women. According to DOD, in some cases, new facilities built exclusively for female use were taken over by male police who would leave existing facilities (in various states of disrepair) to the female police. Consequently, CSTC-A questioned the effectiveness of the MOI’s gender program. The audit recommended that CSTC-A impose a penalty of $4.35 million. This penalty would be slightly more than the amount CSTC-A planned to contribute in the most recent Afghan fiscal year to the MOI for improvements to gender facilities. According to CSTC-A, they hope the penalty will force MOI officials to change their treatment of female police. As of mid-April, CSTC-A reports that the draft report is with MOI for comments that will need to be reviewed and incorporated prior to issuing a final report on the matter.445

MOD and MOI Had Mixed Results in Meeting Conditions for U.S. Funding In March, DOD found that while the MOD and MOI made satisfactory progress in meeting a number of agreed-upon conditions for U.S. funding assistance, both ministries had a significant number of deficiencies. Of 50 conditions defined in the commitment letter, CSTC-A determined that the MOD made satisfactory progress toward meeting 35 conditions

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and insufficient progress toward meeting 15. This quarter, CSTC-A provided approximately $74,000 in incentive funds to the MOD for satisfactory progress in female recruitment. According to CSTC-A, the MOD made progress in recruiting women into the Afghan army, particularly following the introduction of overseas training in Turkey.446 However, CSTC-A found that the MOD’s 215th Corps failed to submit accurate, verifiable ammunition consumption reports on the required monthly basis starting in September 2016. Rather than subject MOD to a penalty, CSTC-A decided to discuss the matter with the MOD chief of general staff. Additionally, CSTC-A found that the MOD failed to provide the required 100% accounting of night-vision devices, prompting CSTC-A to continue withholding future deliveries of night-vision devices to the units that were deficient. Although required by the commitment letters to provide a list of all small arms and provide timely reports for lost weapons, the MOD has yet to provide such a list. Finally, CSTC-A found that MOD has yet to adopt an absent-without-leave policy that is legally enforceable, prompting CSTC-A to suspend all U.S.-based training, schools, and seminars—with the exception of pilot and special forces training—until MOD issues such a policy.447 Of 64 MOI conditions defined in the commitment letter, CSTC-A determined that the MOI made satisfactory progress on 25 conditions, while 39 had insufficient progress. This quarter, CSTC-A provided no incentive funding to the MOI for satisfactory progress. CSTC-A found that the MOI has not sufficiently investigated cases of gross violation of human rights (GVHR). In response, CSTC-A will continue to withhold MOI’s travel budget for all but gender-related trainings and deny raises to the MOI offices that compose the MOI’s GVHR Committee as well as any other pay incentives for general officers and senior ministerial civilians.448 CSTC-A also found that the MOI has yet to develop a plan to divest facilities that they cannot afford. CSTC-A did not impose a penalty for this condition as they wait for MOI to submit an acceptable divestment plan. CSTC-A found that MOI has yet to adopt an absent-without-leave policy that is legally enforceable, prompting CSTC-A to suspend all U.S.-based training, schools, and seminars—with the exception of special unit training—until MOI issues such a policy. Although required by the commitment letter to provide ammunition consumption reports, MOI failed to provide these to CSTC-A. CSTC-A chose not to impose a penalty for this deficiency. MOI was also expected to validate all Afghan Local Police (ALP) personnel by December 2016; however, only 138 of 179 districts hosting ALP forces were assessed as required. CSTC-A believes that the current personnel asset inventory is improving personnel accountability and therefore choose not to impose a penalty as funds were already reduced to pay only those validated ALP personnel.449 The MOI also failed to fully account for night-vision devices, prompting CSTC-A to withhold future deliveries to the MOI headquarters and

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two Afghan National Civil Order Police brigades. Although required by the commitment letters to provide a list of all small arms and provide timely reports for lost weapons, the MOI has yet to provide such a list. Because of this, CSTC-A threatened to not order additional small arms. Finally, CSTC-A found that MOI has failed to respond to an audit that questions approximately $500,000 in municipal service costs. CSTC-A chose to impose a penalty for the amount of questioned funds.450

NATIONAL GOVERNANCE Capacity-Building Programs USAID capacity-building programs seek to improve Afghan ministries’ ability to prepare, manage, and account for on-budget assistance. These programs also provide general assistance to support broader human and institutional capacity building of Afghan government entities.451 As shown in Table 3.14, active programs include USAID’s Afghan Civic Engagement Program (ACEP) that seeks to increase civil-society capacity.

TABLE 3.14

USAID CAPACITY-BUILDING PROGRAMS AT THE NATIONAL LEVEL Afghan Government Total Estimated Cumulative Disbursements, Project Title Partner Start Date End Date Cost ($) as of 3/31/2017 ($) Afghan Civic Engagement Program (ACEP) N/A 12/4/2013 12/3/2018 $70,000,000 $45,208,573 Assistance to Legislative Bodies of Afghanistan (ALBA) Parliament 3/28/2013 3/27/2018 24,990,827 20,130,775 Rasana (Media) N/A 3/29/2017 3/28/2020 9,000,000 -

Source: USAID, response to SIGAR data call, 4/9/2017.

This quarter, USAID launched the $9 million Rasana program. This program aims to support and train female journalists, drive substantive policy discourse about salient development issues in Afghanistan, and advocate for protection of Afghan journalists. Rasana will also build local capacity by providing training, material support, and advocacy to expand media opportunities for women, working with local women’s groups to advance women’s causes in the media, and supporting gender-sensitive content production and programming.452 USAID has also provided $5 million for the $150 million, ARTF-managed Capacity Building for Results (CBR) program. CBR aims to improve the capacity and performance of Afghan government ministries by providing skilled civil servants to implement ministries’ reform programs. CBR provides Afghan government ministries with the opportunity to recruit high-capacity staff into critical posts at salaries closer to market rates. The aim is to increase on-budget service delivery and reduce reliance upon the

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so-called “second civil service” wherein Afghan consultants, instead of civil servants, perform government functions.453 At the October 2016 Brussels Conference, the Afghan government committed to recruit 1,200 government personnel by December 2017 and to fill the remaining positions by 2018. Previously, the Afghan government had committed to recruit at least 800 of 2,400 planned CBR positions by December 2016. The Afghan government reports that it filled 819 CBR positions, as of December 2016. This represents a significant increase over the 196 CBR positions the Afghan government reported it had filled as of September 2016.454 National Assembly From January 19 to March 5, 2017, both houses of parliament were in recess.455 Between September 2016 and January 2017, the lower house of parliament reviewed 34 legislative documents and approved five draft laws, six legislative decrees, and the 1396 budget, and ratified 19 international agreements, one declaration, and three resolutions. During the same period, the upper house of parliament passed 14 bills, adopted 21 international agreements, issued 27 resolutions and declarations, and conducted 15 oversight trips.456 In November 2016, the lower house of parliament passed no-confidence votes for seven of 16 ministers summoned to explain why their ministries executed less than 70% of their development budgets (projects and investments are funded from a ministry’s development budget). From parliament’s perspective, these votes of no-confidence mean that the ministers are dismissed.457 President Ghani ordered the ministers to continue working, referring the legality of the dismissals to the Supreme Court.458 As of March, there has been no attempt to remove the ministers, who continue to fulfill their duties. Additionally, the Supreme Court decision on the constitutional- ity of the votes of no-confidence remained pending.459 In March, ToloNews reported that members of parliament were upset with the government’s response to their votes of no confidence. In particular, the lower house’s administrative board reported that President Ghani has yet to follow through on a promise to finalize nominations for vacant positions. A spokesperson for Chief Executive Abdullah was reported saying that the government was discussing the matter and would soon introduce ministers to parliament.460 Following the recess, the lower house of parliament summoned the ministers of defense and interior, as well as the head of the National Directorate for Security to discuss mounting insecurity. All three survived votes of confidence.461 According to State, the parliament continues to face difficulties achieving quorum, though this occurs less often when sessions relate to the upcoming parliamentary elections and interpellation sessions wherein the parliament

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requires Afghan government ministers to explain their actions. The lower house of parliament achieved quorum in just 21 of 54 sessions, with an average attendance rate of 44.3%. The upper house of parliament achieved quorum in 30 of 36 sessions, with an average attendance rate of 56.6%.462 In April, four members of the lower house of parliament—including two women—were suspended for being absent for 20 days.463 USAID funds the $25 million Assistance to Legislative Bodies of Afghanistan project (ALBA) to help Afghanistan’s parliament operate as an independent and effective legislative, representative, and oversight body.464 Following the January passage of the Afghan budget, ALBA developed an in-depth presentation on the budget for parliamentarians, parliamentary staff, and other stakeholders. This presentation was available in time for the winter recess to enhance knowledge on approved operating and development expenditures. During the debates over the draft budget, ALBA found that several parliamentary commissions lacked access to data on Afghan government program implementation and results. In response, ALBA analyzed the 1396 national budget on behalf of parliament and highlighted the differences between the approved budget and original draft.465 Civil Society The Afghan Civic Engagement Program’s goal is to promote civil-society and media engagement that enables Afghan citizens to influence policy, monitor government accountability, and serve as advocates for political reform. ACEP aims to achieve this goal through five program areas: (1) regular civil-society organization (CSO) engagement with the Afghan government, (2) increased CSO and media expertise in democracy and governance, (3) expanded civic engagement, (4) improved access to independent news and public affairs information, and (5) increased CSO organizational capacity.466 This quarter, USAID finalized a mid-term evaluation of ACEP. The evaluators concluded that ACEP support increased CSOs’ ability to engage with government, monitor government accountability, and advocate for policy priorities. ACEP-supported CSOs showed significant differences in the extent and type of government engagement. Overall, very few of the ACEP-supported CSOs reported engaging in monitoring government accountability. The extent to which CSOs’ engagements increased largely correlated with the extent of ACEP support. For instance, CSOs that received relatively fewer ACEP funds and training showed the least improvement in their ability to engage the Afghan government, monitor government accountability, and advocate for policy priorities.467 Additionally, the evaluators found that the sustainability of ACEP interventions is poor due to a “project”-style approach to the program that is characterized by frequent change of CSO partners, short-term partnerships, small grant sizes, and a focus on outputs. The evaluators noted, however, that since ACEP

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is working to improve democracy and governance in Afghanistan through stronger and more capable media and civil society sectors, the sustainability of the program’s interventions is dependent upon the sustainability of the current government system, which is inherently fragile.468 In January and February, ACEP sponsored two study tours to India for their CSO partners. The first tour, a two-week financial-sustainability study tour, aimed to expose 11 partners to social enterprise and financial sustainability models practiced by Indian CSOs. The second tour, a one-week event for budget-advocacy CSOs, aimed to improve the capacity of 12 CSO partners to understand budget execution and public finance management.469

SUBNATIONAL GOVERNANCE According to the UN Secretary-General, in 2016, all new subnational appointments were made through a merit-based process, bringing the total number of merit-based appointments to 53 district governors (14%) and five deputy provincial governors (15%). A total of 20 mayors (12%) were appointed directly by President Ghani.470 Additionally, the Afghan government has allocated $34 million ($1 million for each province) in the 2017 national budget for development projects as part of the implementation of the Provincial Budgeting Policy.471 A previous provincial-budget pilot attempt ultimately failed in 2012 when donors and the Afghan government could not agree on the source of funding for province-nominated project proposals. Provincial budgeting has been a key priority since the 2012 Tokyo Mutual Accountability Framework. For more details, see pages 128–129 of the January 2014 Quarterly Report to the United States Congress.472 Provincial and Municipal Programs USAID has two subnational programs focused on provincial centers and municipalities: the Initiative to Strengthen Local Administrations (ISLA) and Strong Hubs for Afghan Hope and Resilience (SHAHAR) programs. Table 3.15 summarizes total program costs and disbursements to date.

TABLE 3.15

USAID SUBNATIONAL (PROVINCIAL AND MUNICIPAL) PROGRAMS Cumulative Disbursements, Project Title Start Date End Date Total Estimated Cost ($) as of 3/31/2017 ($) Strong Hubs for Afghan Hope and Resilience (SHAHAR) 11/30/2014 11/29/2017 $73,499,999 $32,762,163 Initiative to Strengthen Local Administrations (ISLA) 2/1/2015 1/31/2020 62,364,687 15,692,620

Source: USAID, response to SIGAR data call, 4/9/2017.

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Initiative to Strengthen Local Administrations The $62 million ISLA program is meant to enable the Afghan government to improve provincial governance in the areas of fiscal and development planning, representation of citizens, and enhanced delivery of public services. ISLA aims to strengthen subnational systems of planning, operations, communication, representation, and citizen engagement, leading to services that more closely respond to all citizens’ needs in health, education, security, justice, and urban services.473 This quarter, ISLA conducted a series of three-day trainings in Kunar, Nangarhar, Laghman, Logar, Zabul, and Farah Provinces. As of February, the training has been completed in 14 ISLA-supported provinces. Training participants include representatives from the provincial governor’s office, provincial council, province-level ministry offices, civil society organizations, and local media. The trainings allowed training participants to voice their ideas for their province’s development plans.474 According to USAID, ISLA aims to enhance the institutional and human capacity of provincial line directorates and provincial development committees to ensure that local priorities are integrated into the national budgets through provincial development plans. Some portions of the provincial plans that are being developed and improved with ISLA’s technical support could be funded with the $34 million that the Afghan government has allocated for provincial budgeting.475

Strong Hubs for Afghan Hope and Resilience The objective of the $73 million SHAHAR program is to create well-governed, fiscally sustainable Afghan municipalities capable of meeting the needs of a growing urban population. The urban portion of Afghanistan’s population has risen from 22% in 2004 to an estimated 25% in 2016/2017. Targeted support to municipal governments, as well as to the deputy ministry of municipal affairs and municipal advisory boards, aims to improve municipal financial management, urban service delivery, and citizen consultation.476 According to USAID, SHAHAR-supported municipalities successfully increased their revenues and budget execution for the recently concluded fiscal year compared to the previous year. These revenue increases include a 26% rise in fixed revenues and a 71% increase in non-fixed revenue, resulting in a 38% overall increase in municipal revenues. The municipalities generated approximately $11 million in revenue surplus that they used to fund development projects. Additionally, municipalities increased their budget execution by 48%.477 This quarter, USAID reported that SHAHAR completed its first-round internship program, resulting in 152 interns being placed with either municipalities, the deputy ministry of municipalities, or SHAHAR offices. The

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majority (85%) of the interns were women. SHAHAR has begun recruitment of 150 interns for the second round, with a minimum of 75% being women.478

RECONCILIATION AND REINTEGRATION The U.S. and Afghan governments agree that the best way to ensure lasting peace and security in Afghanistan is reconciliation and a political settlement with the Taliban.479 According to the United Nations Secretary-General, there was no discern- ible progress on peace talks between the Afghan government and the Taliban this quarter.480 In March, the Taliban denied that the group had met with Pakistani officials to discuss peace talks with the Afghan government.481 This quarter, Russia appeared to step up its involvement in Afghanistan. On December 2, General John W. Nicholson Jr., the commander of U.S. and NATO forces in Afghanistan, labeled Russia, Pakistan, and Iran as malign actors that enable insurgent or terrorist groups in Afghanistan. Nicholson said that Russia lends public legitimacy to the Taliban, which undermines the Afghan government and NATO efforts to stabilize Afghanistan.482 Generals Curtis Scaparrotti (Commander, U.S. European Command and NATO Supreme Allied Commander Europe) and Joseph Votel (Commander, United States Central Command) further suggested that Russia may be supplying the Taliban. According to General Scaparrotti, Russian influence in Afghanistan has increased to the point that includes “perhaps even supply to the Taliban.” General Votel offered that “it’s fair to assume [the Russian government] may be providing some kind of support to [the Taliban] in terms of weapons or other things.”483 The Russian government publicly rejected Scaparrotti’s remarks.484 On March 31, Secretary of Defense James Mattis weighed in on the issue of Russian support for the Taliban, saying “I’m not willing to say at this point if that has manifested into weapons and that sort of thing. But certainly, what they’re up to there in light of their other activities gives us concern.”485 On December 27, 2016, the governments of Russia, China, and Pakistan met in Moscow to discuss the security situation in Afghanistan. At the time, the Afghan government expressed its displeasure at not being invited to the meeting.486 On February 15, Afghanistan, as well as India, and Iran joined the previous three countries for a follow-up meeting in Moscow. The Russian government issued a statement following the meeting noting that participants had agreed to accelerate their efforts to support the Afghan peace process and announcing that the Central Asian republics would be invited to attend the next regional meeting on Afghanistan.487 In March, a spokesperson for Afghanistan’s national security adviser referred to the Russian government as “an important ally.”488 In April, Pakistan’s foreign policy aide to the prime minister publicly called for U.S. participation in the

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Russian-sponsored talks, saying that the U.S. is the “biggest stakeholder” in Afghanistan. Later, however, the acting State spokesman said that the U.S. did not intend to participate in the talks as their purpose was unclear.489 In an interview with Bloomberg, Russia’s special envoy for Afghanistan, Zamir Kabulov, was quoted saying that the Taliban “have given up global jihad and have become a national force,” concluding that the Taliban is “justified” in opposing a foreign military presence.490 According to the UN Secretary-General, bilateral relations between Afghanistan and Pakistan continue to be strained this quarter, with senior officials of both governments blaming the other country for insurgent attacks. On February 17, Pakistan closed its border with Afghanistan to all traffic and conducted cross-border shelling, targeting suspected militants on Afghan territory. According to State, the U.S. and UK governments intervened diplomatically, leading to reopening of the Afghanistan-Pakistan border on March 20.491 After it reopened the border, Pakistan announced that it would start building a fence along the areas bordering Afghanistan’s Nangarhar and Kunar Provinces.492 An MOI spokesperson said that the Afghan government will not allow such construction.493 In September 2016, the Afghan government finalized a peace agreement with the Hezb-e Islami Gulbuddin (HIG) insurgent group.494 In the peace deal, the Afghan government committed to several actions, including requesting the removal of HIG leaders from the UN’s and others’ sanctions lists.495 In January, the Afghan government successfully lobbied the UN to remove Gulbuddin Hekmatyar’s name from the UN sanctions regime. According to State, the delisting demonstrated a strong international and regional consensus for Afghanistan’s peace and reconciliation efforts, including from two of Afghanistan’s influential neighbors, Russia and China.496 According to the UN Secretary-General, Hekmatyar’s political rivals fear his return to Afghanistan, as they believe a united HIG could become the country’s largest political party.497 The UN Secretary-General also noted that human rights advocates have expressed their concern with the terms of the HIG peace agreement, given the agreement’s failure to fully address victims’ grievances and suspected human rights violations.498 President Ghani, while discussing the balance between justice and peace in March 2015, said “peace means forgiving blood” and insisted that the Afghan government “cannot sacrifice the future for the sake of the past.”499 In April, Ambassador Franz-Michael Mellbin, Head of Delegation of the European Union to Afghanistan, said the EU is considering whether to financially support the Afghan government’s peace deal with HIG. Ambassador Mellbin insists, however, that HIG “will not have any control over the money.” According to the Wall Street Journal, U.S. officials have not yet received a request from the Afghan government to drop the terrorist designation for Hekmatyar or HIG.500

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Afghanistan Peace and Reintegration Program This quarter, Resolute Support reported that they are in the process of On March 31, 2016, the Afghanistan Peace and Reintegration Program establishing a Counter Threat Finance Cell (CTFC). The Resolute Support (APRP) closed following a decision by APRP donors, the Afghan govern- CTFC has 33% of its personnel on board and is equipping a facility for their ment, and UNDP.501 The APRP was an Afghan-led program to reintegrate use. The CTFC has begun coordinating their efforts with the U.S. Embassy low-level insurgent fighters and their commanders into Afghan civil soci- in Kabul. The CTFC may serve as a successor to the Afghan Threat Finance ety.502 The APRP was the only institutional mechanism within the Afghan Cell (ATFC), a U.S. unit formed to track and stop terrorist financing. The government with the capacity to pursue both high-level reconciliation nego- goals and scope of the CTFC are still being developed, with SIGAR partici- tiations and provincial-level reintegration of insurgent fighters.503 pating in this process.510 The Afghan government plans to launch a successor to the APRP in the form of a five-year Afghanistan National Peace and Reconciliation (ANPR) Project Summary strategy. According to State, the ANPR is expected to shift from the disar- The United States has assisted the formal and informal justice sectors At the October Brussels Conference, the mament, demobilization, and reintegration focus of the APRP to negotiating through several mechanisms. These include State’s Justice Sector Support Afghan government committed to simplify political settlements with armed opposition groups, forging national and Program (JSSP) and Justice Training Transition Program (JTTP). These and 15 to 25 public services, integrate these international consensus on a peace process, and promoting and institution- other rule-of-law and anticorruption programs are shown in Table 3.16. services into a one-stop shop by 2017, alizing a culture of peace.504 As of March, the establishment of the ANPR is USAID has a cooperation arrangement with the United Kingdom’s and expand this model to three additional still pending President Ghani’s approval.505 Department for International Development to fund the Independent Joint locations in Kabul by 2018. In December 2016, State provided $1.1 million to support the ANPR. Anti-Corruption Monitoring and Evaluation Committee (MEC). USAID Source: Brussels Conference on Afghanistan, “Self-Reliance through Mutual Accountability Framework: SMART Deliverables While State intended to disburse another $3.9 million in early 2017, this funds the MEC’s monitoring, analysis, and reporting activities, including its 2017/2018,” 10/5/2016, p. 2. has not yet occurred since the ANPR is not finalized and approved by vulnerability-to-corruption assessments.511 President Ghani.506 USAID aims to improve public services by reducing corruption opportu- In February, the U.S., UK, and South Korean governments along with nities in the Afghan government’s administrative and business processes. In UNAMA sent a letter to President Ghani expressing their readiness to November 2015, USAID modified the existing Advancing Effective Reforms support a comprehensive, “whole of government approach” to peace and for Civic Accountability (AERCA) project—previously the Afghanistan reconciliation. According to the letter, the Afghan National Security Council Electoral Reform and Civic Advocacy project—to address immediately will supervise the peace process, without compromising the independence identifiable corrupt practices.512 National Security Adviser Lieutenant of the previous lead, the High Peace Council (HPC). The HPC, meanwhile, AERCA had identified 10 services that are important to Afghans but are General H. R. McMaster previously is expected to focus its efforts toward building an Afghan consensus on perceived as not working as well as expected: (1, 2) disability and martyr commanded the Combined Joint InterAgency peace, engaging in peace negotiations, and monitoring the implementation Task Force Shafafiyat (Transparency), an anticorruption task force, from 2010 to of peace agreements. The authors noted that their financial support for an 2012. SIGAR’s Lessons Learned report Afghan-led and Afghan-owned peace process is predicated upon a viable, on U.S. anticorruption efforts found that technically sound disbursing agent, and implementing partner.507 Shafafiyat and other U.S. government task forces had learned much about networks engaged in corruption. Their work provided RULE OF LAW AND ANTICORRUPTION civilian and military decision makers with In March, President Ghani was quoted in Afghan media saying that the a more complete picture of the corruption sovereignty of law is weak in Afghanistan. In particular, he decried how challenge, including insights on the officials consider themselves above the law and “everyone thinks they can intersection of corruption, the drug trade, violate the law with the power of a gun.”508 crime, and the insurgency. Shafafiyat In April, U.S. Special Chargé d’Affaires to Afghanistan, Ambassador Hugo later transitioned into Resolute Support’s Llorens, said that while progress has been made in increasing democracy Essential Function 2 (Transparency, Accountability and Oversight). and prosperity in Afghanistan, corruption continues to hold Afghanistan back from its full potential and outrage Afghan citizens. He called on Afghans to demand transparency and accountability from their leaders say- Source: SIGAR, Corruption in Conflict: Lessons from the U.S. 509 Experience in Afghanistan, 9/2016, pp. 40, 96. ing, “Corruption is a cancer that will kill Afghanistan if left unchecked.”

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This quarter, Resolute Support reported that they are in the process of establishing a Counter Threat Finance Cell (CTFC). The Resolute Support CTFC has 33% of its personnel on board and is equipping a facility for their use. The CTFC has begun coordinating their efforts with the U.S. Embassy in Kabul. The CTFC may serve as a successor to the Afghan Threat Finance Cell (ATFC), a U.S. unit formed to track and stop terrorist financing. The goals and scope of the CTFC are still being developed, with SIGAR participating in this process.510 Project Summary The United States has assisted the formal and informal justice sectors At the October Brussels Conference, the through several mechanisms. These include State’s Justice Sector Support Afghan government committed to simplify Program (JSSP) and Justice Training Transition Program (JTTP). These and 15 to 25 public services, integrate these other rule-of-law and anticorruption programs are shown in Table 3.16. services into a one-stop shop by 2017, USAID has a cooperation arrangement with the United Kingdom’s and expand this model to three additional Department for International Development to fund the Independent Joint locations in Kabul by 2018. Anti-Corruption Monitoring and Evaluation Committee (MEC). USAID Source: Brussels Conference on Afghanistan, “Self-Reliance through Mutual Accountability Framework: SMART Deliverables funds the MEC’s monitoring, analysis, and reporting activities, including its 2017/2018,” 10/5/2016, p. 2. vulnerability-to-corruption assessments.511 USAID aims to improve public services by reducing corruption opportunities in the Afghan government’s administrative and business processes. In November 2015, USAID modified the existing Advancing Effective Reforms for Civic Accountability (AERCA) project—previously the Afghanistan Electoral Reform and Civic Advocacy project—to address immediately identifiable corrupt practices.512 National Security Adviser Lieutenant AERCA had identified 10 services that are important to Afghans but are General H. R. McMaster previously perceived as not working as well as expected: (1, 2) disability and martyr commanded the Combined Joint InterAgency Task Force Shafafiyat (Transparency), an anticorruption task force, from 2010 to TABLE 3.16 2012. SIGAR’s Lessons Learned report RULE OF LAW AND ANTICORRUPTION PROGRAMS on U.S. anticorruption efforts found that Shafafiyat and other U.S. government task Cumulative Disbursements, Project Title Start Date End Date Total Estimated Cost ($) as of 3/31/2017 ($) forces had learned much about networks Justice System Support Program II (JSSP II) 6/16/2010 2/28/2017 $285,644,451 $267,479,751 engaged in corruption. Their work provided Assistance for Development of Afghan Legal Access and 4/15/2016 4/14/2021 68,163,468 4,718,418 civilian and military decision makers with Transparency (ADALAT) a more complete picture of the corruption Electoral Reform and Civic Advocacy (AERCA)* 7/13/2009 8/31/2017 51,302,682 45,373,697 challenge, including insights on the Corrections System Support Program (CSSP IV)** 3/1/2016 8/27/2017 22,564,474 12,469,724 intersection of corruption, the drug trade, Justice Training Transition Program (JTTP) Follow On*** 1/2/2013 11/30/2017 47,759,796 47,759,796 crime, and the insurgency. Shafafiyat Delegated Cooperation Agreement (DCAR) with the Department later transitioned into Resolute Support’s for International Development (DFID) for Independent Joint Anti- 5/19/2015 8/31/2020 3,000,000 2,000,000 Essential Function 2 (Transparency, Corruption Monitoring and Evaluation Committee (MEC) Accountability and Oversight). Note: *On November 1, 2015, USAID extended the AERCA award beyond the planned December 31, 2015, end date, added $12.6 million in estimated costs, and incorporated additional anticorruption activities into the program description. The information in the table refers to the entire award, not simply the new anticorruption portion covered by the modification. **Disbursements as of 1/29/2017. ***The follow on project is a no-cost extension with funds having already been disbursed. Source: SIGAR, Corruption in Conflict: Lessons from the U.S. Experience in Afghanistan, 9/2016, pp. 40, 96. Source: State, INL, response to SIGAR data call, 3/24/2017; USAID, response to SIGAR data call, 4/9/2017.

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payments by the Ministry of Labor, Social Affairs, Martyrs and Disabled; (3, 4, 5) driver’s license issuance, vehicle registration, and national identification by the MOI; (6, 7) issuance of diplomas and transcripts by the Ministry of Higher Education; (8) small-business license registration by the Kabul Municipality; (9) property registration by the Supreme Court; and (10) high-school diploma issuance by the MOE.513 In August 2016, USAID and AERCA decided to suspend AERCA’s assistance to the driver’s license service after determining that there was insufficient political will for reform in the MOI’s traffic department to enable worthwhile collaboration.514 This quarter, AERCA conducted a rapid assessment of the Population Registration Directorate (PRD) in Jalalabad City, Nangarhar Province. AERCA found that the PRD serves between 400 to 750 citizen applicants per day, with most seeking issuance of new national identification card. The current process for issuance of a new identification card takes an average of four work days, which according to AERCA is often perceived as inordi- nately lengthy and frustrating. In particular, applicants from rural districts are particularly upset when they learn that the process takes more than one or two days. Almost two-fifths of the process time is spent to obtain written approval from the provincial governor, a frustrating procedure that AERCA reports has no legal basis. AERCA identified a number of redundant processes that may be simplified in order to reduce wait times.515 AERCA found that the province-level PRD has been more burdened in recent years as a number of district-level PRD offices along have ceased to function due to growing insecurity. In districts where the local PRD office does function, local residents often do not visit the offices for fear of repri- sal by insurgents. The would-be applicants, many of them returnees from Pakistan, and other internally displaced persons, often have to visit the province-level PRD in Jalalabad City.516 AERCA plans to conduct a census and registration of businesses in Kabul’s 22 municipal districts. AERCA’s surveyors present themselves to the surveyed businesses as Kabul Municipality staff. As of February, AERCA staff have registered 6,089 businesses in Kabul City’s Sixth Municipal District (compared to 2,355 businesses previously registered) and 11,080 businesses registered in the Fifth Municipal District (compared to 6,175 businesses previously registered).517 In February, AERCA met with representatives of the Ministry of Economy (MOEc) to discuss possible assistance options. The MOEc representatives highlighted challenges associated with nongovernmental organizations (NGOs) including: (1) poor management of NGO registration and license renewal, (2) lack of transparency and accountability of NGO operations, (3) mismanagement of human resources, (4) non-compliance of procurement and accounting procedures with internationally accepted standards and principles, and (5) insufficient monitoring and evaluation of NGO activities. According the MOEc data, over 2,000 Afghan and international

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NGOs operate in Afghanistan and receive approximately $1 billion in donor and Afghan government assistance. Following these discussions, AERCA is developing a service-delivery improvement implementation plan and a memorandum of understanding with MOEc.518 Last quarter, State’s $48 million Justice Training Transition Program (JTTP), in partnership with the Supreme Court, conducted data collection for an institutional learning needs assessment (ILNA) to identify the most prevalent learning needs among judges. JTTP found that Afghanistan’s judges generally valued training and continuing professional development. JTTP will continue to work with the Supreme Court’s training department to learn from the ILNA exercise and to develop capacity to run such assessments independently. JTTP also partnered with the Attorney General’s Office (AGO) to develop an ILNA to evaluate prosecutors’ ability to perform their tasks. JTTP and the AGO are finalizing the ILNA for deployment, expected in the next quarter.519 In April 2016, USAID launched the $68 million Assistance for the Development of Afghan Legal Access and Transparency (ADALAT) program. ADALAT aims to (1) increase the effectiveness and reach of the formal justice sector, (2) strengthen the linkages between the formal and traditional justice sectors, and (3) increase citizen demand for quality legal services. ADALAT (“justice” in Dari and Pashto) will work closely with Afghan justice institutions to increase the professionalism of justice- sector actors, to improve judicial administrative and management systems, and to strengthen the Ministry of Justice (MOJ) Department of the Huquq Huquq offices provide an opportunity (“rights”) and its interaction with traditional justice on civil-related matters. for citizens to settle civil cases within It also will develop the technical, organizational, and management capac- the formal system before being brought ity of USAID civil-society partners operating in the formal and traditional into the court system justice sectors, and will support their missions to eliminate practices that violate human rights in traditional dispute resolution within the informal justice sector and to increase citizen awareness of and demand for fair and Source: Afghanistan Justice Sector Support Program, accessible justice services.520 “Ministry of Justice,” 2016. Afghan Correctional System According to State, the inmate population of Afghanistan’s prisons, managed by the General Directorate of Prisons and Detention Centers (GDPDC), increased by an average of 6.15% annually over the past five years. As of January 31, the GDPDC incarcerated 26,862 males and 906 females, while the MOJ’s Juvenile Rehabilitation Directorate (JRD) incarcerated 685 male juveniles and 91 female juveniles. These incarceration totals do not include detainees held by any other Afghan governmental organization, as State’s Bureau of International Narcotics and Law Enforcement Affairs (INL) does not have access to their data.521 Overcrowding is a persistent, substantial, and widespread problem within GDPDC facilities for adults, despite presidential amnesty decrees

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and the transfer of National Security Threat inmates to the MOD that have reduced the prison population significantly. As of January 31, the total male provincial-prison population was at 197% of capacity, as defined by the International Committee of the Red Cross’s (ICRC) minimum standard of 3.4 square meters per inmate. The total female provincial-prison population was at 78% of the ICRC-recommended capacity. The JRD’s juvenile-rehabilitation centers’ population was at 54% of ICRC-recommended capacity.522 In February and April, hundreds of prisoners at Pul-i Charkhi Prison went on hunger strike to protest what they claimed were violations of their rights. Almost 20 prisoners sewed their lips shut for being denied the option of serving their prison sentences in their home provinces and for not being pardoned by the Afghan president.523 According to State, the latest Corrections System Support Program (CSSP) successes related to small-scale infrastructure development. In December 2016, a new hospital was opened at Pul-e Charkhi Prison after nine months of renovation and coordination. Through CSSP, State donated over 30 medical items to the hospital. According to State, Pul-e Charkhi inmates will now have access to emergency care, diagnostic and lab services, internal medicine services, infectious disease treatment, some surgical services, dental care services, pharmacy services, and mental health and drug addiction treatment services. Also in December 2016, CSSP added lightning rods to the Counternarcotics Justice Center, fulfilling a recommendation from a SIGAR inspection. Finally, State completed security renovations at the Balkh Juvenile Rehabilitation Center and upgraded the electrical and sanitation systems at the Kabul Female Prison and Detention Center.524 Anticorruption At the October 2016 Brussels Conference, the Afghan government agreed to draft and endorse an anticorruption strategy for the whole of government by the first half of 2017. The government says it will implement this strategy by the second half of 2017. Additionally, five revenue-generating ministries are to publicly report on implementation progress of their anticorruption action plans in 2017.525

Anti-Corruption Justice Center In May 2016, President Ghani announced the establishment of a specialized anticorruption court, the Anti-Corruption Justice Center (ACJC).526 The ACJC brings together Major Crimes Task Force (MCTF) investigators, Afghan Attorney General’s Office (AGO) prosecutors, and judges to combat serious corruption.527 The ACJC’s jurisdiction covers major corruption cases committed in any province involving senior officials or substantial monetary losses of a minimum of five million afghanis (approximately $73,000).528 The Anti-Corruption Justice Center announcing sentences in December 2016. On February 15, the ACJC convicted a district police chief of money (Afghan Attorney General’s Office photo) laundering and sentenced him to three years’ imprisonment.529

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On March 26, the ACJC convicted four Ministry of Urban Development and Housing (MUDH) employees on charges of embezzlement and misuse of authority. Mohammad Amin Qani and Sayed Amin Sadat, both from the ministry’s Apartments Cohesion unit, were sentenced to 20 years in prison for embezzling more than $12.8 million, while Ahmad Nawaz Bakhtyar and Mohammad Yaqub Ibrahimi of the MUDH Housing Enterprise unit were sentenced to seven years each. Qani was ordered to return the stolen funds, while both he and Sadat were individually fined more than $2.3 million and required to collectively pay a fine equal to the amount stolen. Bakhtyar and Ibrahimi were also each fined more than $6.5 million. Qani, Sadat, and Bakhtyar are currently in custody, while Ibrahimi remains at large and was tried in absentia. Those convicted were among six senior MUDH officials President Ghani suspended in 2015 for embezzling millions of dollars in several urban development and housing projects.530 In March, the ACJC also sentenced the provincial council chief for Herat Province—in absentia—to a two-and-a-half-year jail sentence for abuse of his authority. He was accused of interfering with the affairs of the Herat office of the AGO, including forcibly freeing a suspect. In February 2016, the same provincial council chief claimed to have documents proving that the Herat education department paid millions of afghanis for ghost teachers and schools. In February 2017, members of the Herat provincial council also participated in demonstrations against corruption in the Herat provincial government.531 On April 10, two Major Crimes Task Force (MCTF) investigators attached In November 2016, SIGAR released a report to the ACJC were shot dead on their way to the office in Kabul.532 that reviewed 25 USAID-funded schools in According to Resolute Support, the international community has Herat Province. SIGAR observations from demanded that ACJC investigators, prosecutors, and judges be vetted and these site visits indicated that there may be problems with student and teacher polygraphed. While the MCTF has complied with this requirement, the AGO absenteeism at many of the schools visited and Supreme Court continue to resist or refuse. Resolute Support fears that in Herat that warrant further investigation without proper vetting of ACJC personnel, there is a strong likelihood that by the Afghan government. the ACJC could be captured by corrupt elements due to institutional cor- 533 Source: SIGAR, Schools in Herat Province: Observations from ruption within the AGO and court system. Site Visits at 25 Schools, SIGAR 17-12-SP, 11/4/2016.

Afghan Attorney General’s Office According to Resolute Support, other anticorruption bodies, in particular the MCTF, continue to lack faith in the AGO as they continue to observe anticorruption cases being stymied by the AGO. Resolute Support reports that the AGO suffers from institutional corruption and is not transparent in tracking cases post-investigation into prosecution.534

Independent Joint Anti-Corruption Monitoring and Evaluation Committee A presidential decree established the MEC in March 2010. Its mandate is to develop anticorruption recommendations and benchmarks, to monitor

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efforts to fight corruption, and to report on these efforts. Its board includes three Afghan members and three international members, and is led by an Afghan executive director. The MEC has approximately 20 staff. USAID notes that the MEC may increase its staff since President Ghani has increasingly sought analytical products from it.535 This quarter, the MEC published its second quarterly monitoring report on implementation of recommendations contained in their June 2016 vul- nerabilities-to-corruption report on the Ministry of Public Health (MOPH). Of the 115 recommendations, the MEC found that the MOPH has fully implemented 14 and partially implemented 63. According to the MEC, the MOPH has established a National Health and Medical Product Regulatory Authority (NHMRA) to monitor pharmaceutical markets, licensing medical facilities and pharmacists, registering pharmaceuticals and medical products, and controlling quality and price of medicines in the markets. The NHMRA has dissolved 95 of the 467 registered production companies and started reregistration process of these companies. MOPH also established a Complaints Handling Office (CHO) which has addressed 120 complaints.536 Also this quarter, the MEC reviewed the Ministry of Communications and Information Technology’s (MCIT) anticorruption plan. The MEC concluded that MCIT has almost entirely failed to implement this plan. For example, while the MCIT collects 10% users’ fee from mobile phone users, the ministry cannot verify if the amount deposited into its account represents actual collection of these fees. Additionally, MCIT has yet to conduct a study to determine which 10 public services can be automated in the next three years, despite having a deadline of May 2017.537

High Office of Oversight and Anticorruption The High Office of Oversight and Anti-Corruption (HOOAC) was established in July 2008 by presidential decree to oversee and coordinate implementation of the Afghan government’s anticorruption strategy. The HOOAC collects corruption complaints through a hotline and complaint boxes installed in several ministries and other public-service delivery institutions, and conducts the initial investigation of corruption allegations that it receives before referring allegations to the AGO for further investigation and possible prosecution. According to USAID, these investigations seldom lead to prosecution. Mutual recrimination between AGO and HOOAC is common.538 The HOOAC is also charged with collection and verification of asset declarations submitted by Afghan government officials.539 As of January, Resolute Support reports that the MOD submitted 194 asset declarations to the HOOAC while the MOI submitted 210 of 310 required asset declarations. Resolute Support notes, however, that asset declaration forms are not being routinely submitted as new personnel begin or depart their positions.540

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In January, the lower house of parliament recommended that the upper house of parliament dissolve the HOOAC, following up on a two-year-old lower house decision. The HOOAC argues that its dissolution would contravene the Afghan Constitution as well as international conventions. USAID’s ALBA program advised the lower house of parliament to refer the matter to the Independent Commission for Overseeing the Implementation of the Constitution for interpretation—an entity that has uncertain authorities for issue opinions on constitutional questions, as it established in 2010, on the basis of a 2007 law passed by parliament that was later declared unconsti- tutional by the Supreme Court.541 As of April, USAID reports that there has been no resolution to this issue.542

Security Services In March, the MOD reported that it had fired 1,394 army personnel, including eight generals, for corruption in the past year. The MOD is currently reviewing more than 1,800 allegations of corruption, with nearly 170 cases having been referred to law-enforcement agencies and 300 already prosecuted. These cases include suspected abuse of office and illegal weapons sales. According to the MOD, Mohammad Moein Faqir, a former commander of 215th Corps in Helmand Province, was among the MOD personnel arrested recently. The MOD said General Faqir is accused of misuse of supplies and soldiers’ food, neglect of duty, and lack of transparency in the use of fuel, food, and other supplies.543 In April, the MOI announced that it had found 239 cases of corruption in the previous year. Reportedly, 187 persons were arrested, including 40 police personnel and 15 high-ranking officials.544 According to Resolute Support, the MOD has shown increased will to respond to corruption following an October 9, 2016, meeting in which President Ghani demanded action. Shortly after this meeting, the MOD ordered the establishment of corps-, brigade-, and independent command- level Transparency and Accountability Committees (TAC). These TACs are expected to meet bimonthly and send monthly reports to the General Staff Inspector General (GS IG). The GS IG, in turn, is to analyze these reports and brief the results to a General Staff-level TAC.545 Thus far, Resolute Support has been able to attend one meeting of the General Staff- level TAC, in which the GS IG highlighted cases from across the Afghan army corps.546 The MOI Inspector General has 21 multi-province zonal-level inspector general positions covering the eight zones. Personnel have deployed to 19 of these positions. According to Resolute Support, the inspector general personnel at four of the eight zones are not yet trained and have yet to hold a meeting. Resolute Support is currently unable to assess the effectiveness of the MOI inspector general personnel at the remaining four zones, despite hearing reports that they have received training and are holding meetings.547

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Major Crimes Task Force Since January 2016, the MCTF has opened 336 cases (including 112 corruption investigations), and arrested 195 suspects.548 According to Resolute Support, despite supportive MOI leadership in the form of the MCTF director and his superior, the chief of Afghan Anti- Crime Police, the MCTF continues to face challenges from the broader MOI. For example, the MOI reduced the MCTF operational budget to half of its previous amount. In addition, the MOI has withheld the equivalent of more than a year’s worth of the MCTF operational budget. According to Resolute Support, this budget cut appears to coincide with the increase in corruption cases and arrests of significant government officials.549 Resolute Support reports that the MCTF is being stretched thin as it assumes the additional duty to provide security for ACJC trials, hindering their case work. While senior MOI leadership are aware of this problem, SIGAR Special Agent in Charge Charles no progress has been made toward resolving it this quarter. Additionally, Hyacinthe with Brigadier General Abdul Ghayor Andarabi, Director of the Major Resolute Support reports that the MCTF continues to be burdened with Crimes Task Force. (SIGAR photo) requests for investigative support from the AGO and the ACJC on cases which are not initiated at the MCTF, interfering with the MCTF’s own case work. The requests from the AGO and ACJC bring added costs to MCTF for travel, meals, and other duty-related expenses. However, MCTF’s operational budget has not been increased to match the demands.550 Between November 2016 and January 2017, Resolute Support advisers were unable to travel to the MCTF facility due to security concerns. While Resolute Support advisers were able to remain in contact via telephone and meetings at their own facility, Resolute Support reports the positive momentum and confidence of the MCTF personnel may have been eroded by RS’s reduced personal contact with MCTF investigators.551 According to Resolute Support, the Afghan government needs to take ownership of and empower the MCTF, which Resolute Support sees as “swimming against the tide” of the general state of Afghan government corruption. Despite recent progress, Resolute Support reports that the MCTF’s effectiveness against high-level corruption continues to be limited by external factors, such as a lack of AGO transparency and political pressure.552

HUMAN RIGHTS In March, the State Department released its annual report on human rights in Afghanistan. According to State, the most significant human rights problems in 2016 were widespread violence, including indiscriminate attacks on civilians by armed insurgent groups; armed insurgent groups’ killings of persons affiliated with the government; torture and abuse of detainees by government forces; widespread disregard for the rule of law and little accountability for those who committed human rights abuses; and targeted violence and endemic societal discrimination against women and girls.553

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Additionally, State pointed out other human rights problems that included extrajudicial killings by security forces; ineffective government investigations of abuse and torture by local security forces; poor prison conditions; arbitrary arrest and detention, including of women accused of so-called moral crimes; prolonged pretrial detentions; judicial corruption and ineffectiveness; violations of privacy rights; restrictions on freedom of speech, press, religion, and movement; pervasive governmental corruption; underage and forced marriages; abuse of children, including sexual abuse; trafficking in persons, including forced labor; discrimination against persons with disabilities; discrimination and abuses against ethnic minorities; societal discrimination based on race, religion, gender, sexual orientation, and HIV/AIDS status; and abuse of workers’ rights, including child labor.554 Widespread disregard for the rule of law and official impunity for those who committed human rights abuses were other serious problems identified by State. The government did not consistently or effectively prosecute abuses by officials, including security forces. State did note, however, that civilian authorities generally maintained control over the security forces, although there were occasions when security forces acted independently.555 Refugees and Internal Displacement There have not been significant changes in refugee movements during the quarter. According to State, following the December 2016 decision of the UN High Commissioner for Refugees (UNHCR) to close its voluntary repatriation centers in Pakistan for the winter, there have been no voluntary refugee repatriations from Pakistan. In 2016, a total of 370,102 Afghans registered as refugees returned from Pakistan, 2,290 returned from Iran, and 185 returned from other countries. UNHCR predicts a similar high number of refugee returns in 2017 when the repatriation centers open in April.556 State sees four primary factors affecting returns in 2017: (1) the introduction of tighter border controls by Pakistani authorities; (2) the harassment of Afghan communities in Pakistan; (3) the extension of proof-of-registration cards, which provide legal status for Afghan refugees in Pakistan, to December 31, 2017; and (4) the reduction of UNHCR-provided repatriation grants from $400 per person to $200 per person.557 UNHCR provides services at the voluntary repatriation centers (in Pakistan) and at encashment centers (in Afghanistan) to returning refugees such as vaccinations, land mine awareness, school enrollment information, and referral services for those that require additional assistance. In addition to protection assistance, UNHCR provides cash assistance for reintegration. In 2016, these grants were $400 per person. Starting April 2017, UNHCR will reduce this assistance to $200 per person for sustainability purposes.558 Typically, the $400 cash grants were expended within two to three months.559 Undocumented Afghans (migrants) are also returning in large numbers in recent months. The International Organization for Migration reports that

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12,149 undocumented Afghan migrants have returned from Pakistan in 2017, as of March 25.560 As shown in Figure 3.28, there has also been an increase in internal displacement. According to the UN’s Office for the Coordination of Humanitarian Affairs (OCHA), 660,639 people in Afghanistan fled their homes due to conflict in 2016—the highest number of displacements

FIGURE 3.28

CONFLICT-INDUCED DISPLACEMENTS (THOUSANDS)

800

700

600

500

400

300

200

100

0 2010 2011 2012 2013 2014 2015 2016 2017 (as of 3/19)

Source: UN OCHA, “Afghanistan: Con ict Induced Displacements in 2017 - Snapshot,” 3/19/2017.

FIGURE 3.29

FIRST-TIME AFGHAN ASYLUM APPLICANTS TO THE EUROPEAN UNION DURING 2016

25,000

20,000

15,000

10,000

5,000

0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: EUROSTAT, “First time asylum applicants in the EU-28 by citizenship, Q4 2015–Q4 2016,” 3/16/2017.

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on record and a 40% increase over the previous year. The UN Secretary- General reports that 220 of Afghanistan’s districts had conflict-induced displacement. OCHA reported that as of March 25, 47,404 individuals have been displaced so far in 2017.561 Eurostat, the statistical office of the EU, reported 182,985 first-time Afghan asylum seekers in the EU in 2016. As shown in Figure 3.29, the number of Afghan asylum applications from October to December was 65% lower than the number for the previous three months.562 A Ministry of Refugees and Repatriation spokesman said in December that approximately 10,000 Afghans have returned from Europe in 2016.563

GENDER The largest gender-focused initiative in USAID’s history is the Promote partnership that aims to assist over 75,000 Afghan women in achieving leadership roles over five years in all parts of society, including business, academia, politics, and public policy.564 USAID has committed $280 million to Promote and hopes to raise an additional $200 million from other international donors.565 No other donors have committed to contribute funds to Promote; however, USAID reports that Promote was designed to achieve the project targets with or without additional funding.566 Table 3.17 show the current Promote programs.

TABLE 3.17

USAID GENDER PROGRAMS Cumulative Disbursements, Project Title Start Date End Date Total Estimated Cost ($) as of 3/31/2017 ($) Promote: Women in the Economy 7/1/2015 6/30/2020 $71,571,543 $15,046,976 Promote: Women's Leadership Development 9/23/2014 9/22/2019 41,959,377 18,495,491 Promote: Women in Government 4/21/2015 4/20/2020 37,997,644 9,096,718 Promote: Women’s Rights Groups and Coalitions 9/2/2015 9/1/2020 29,534,401 6,369,704 Promote: Economic Empowerment of Women in Afghanistan 5/8/2015 5/7/2018 1,500,000 300,000 Promote: Scholarships 3/4/2015 3/3/2020 1,247,522 1,247,522

Source: USAID, response to SIGAR data call, 4/9/2017.

As of March, 3,595 women have participated in Promote’s Women in the Economy (WIE) internship and apprenticeship program, which focuses on internships in the healthcare, education, information technology, banking, and finance sectors. Between January and March, 1,423 women were participating in internships and 12 had found jobs. Since the start of WIE, 664 female interns have advanced into full time employment either within the host company, or by finding a Promote-defined new and better job.567 This quarter, 1,158 young women graduated from Promote’s Women’s Leadership Development (WLD) primary training program, bringing the

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First Lady of Afghanistan Rula Ghani delivers remarks during a Women in Security Advisory Committee session. (U.S. Navy photo by Lt. Jg. Egdanis Torres Sierra) total to 3,803 graduates. Of the total number of graduates, 137 graduates were hired by the Afghan government, 265 graduates are participating in internships, apprenticeships, and with other USAID Promote programs, and 143 graduates hired by private sector employers. WLD has extended its training to women at the MOI’s police academy with the aim of building women’s leadership within the police force.568 Promote’s Women in Government (WIG) program continued the training of 102 first-cohort interns for their final three-month practicum with one of 17 Afghan government ministries, four independent agencies, or with the Kabul Municipality. This final phase marks the end of their year-long internship. In February, WIG met with Afghan government human resources directors to identify vacancies and push for the hiring of qualified interns. Meanwhile, the second cohort of 347 WIG interns continued their six- month civil service training at the Ministry of Labor, Social Affairs, Martyrs, and Disabled’s Institute for the Disabled in Kabul. Following this initial training, the interns will participate in a three-month leadership development seminar offered by WLD. WIG is also providing civil service training to a third cohort of 540 female university graduates and a fourth cohort of 145 females.569 As of January, WIG reports that 15 of the initial 16 WIG pilot graduates are employed full-time by the Afghan government, though three were employed on temporary, three-month contracts.570 The SMAF includes several short-term deliverables related to women’s rights, including the requirement for an implementation and financing plan for the National Action Plan for Women, Peace, and Security approved at the end of 2015, with implementation starting by mid-2016; an anti-harassment regulation for improving working environments for public-sector women, to be issued by mid-2016; and dedicated violence-against-women

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prosecution units established in 26 provinces by December 2016.571 The Afghan government reported that it achieved the deliverable related to the implementation of the National Action Plan for Women, Peace, and Security. The budget for the first phase of the action plan, scheduled to run from 2016 to 2020, has been approved at $51.5 million. The Afghan government, however, committed only $11 million, leaving a $39.5 million funding gap.572 At the October 2016 Brussels Conference, the Afghan government agreed to demonstrate progress in its National Action Plan for Women by delivering annual progress reports in 2017 and 2018. Within this deliverable, Afghanistan committed to increase the percentage of female civil servants from the current level (using a 2015 baseline) by two percentage points in 2017 and an additional two percentage points in 2018.573 According to the Afghan Central Statistics Office, 21.9% of Afghan civil service employees were women in 2015–2016, a 0.7% increase over the previous year.574 The Afghan government also agreed to establish special courts on violence against women in 15 provinces by December 2017 and the remaining provinces by December 2018.575 Dedicated violence-against-women prosecution units are also to be established and functional, including adequate staffing, in all 34 provinces by December 2017. The Afghan government committed to incrementally increasing the percentage of women serving as judges and prosecutors in these special courts and prosecution units.576 The Afghan government reports that, as of January, the AGO employs 355 female prosecutors. Additionally, local inspectors for the elimination of violence against women currently operate in 23 provinces. However, the 11 remaining provinces lack dedicated inspectors due to insecurity.577 According to State, as of April, 33 provinces host elimination of violence against women prosecution units.578 Finally, Afghanistan committed to launch a women’s economic-empowerment plan by the first half of 2017 and produce an implementation report by 2018.579 According to the Afghan government, the final draft of this plan has been approved and the budget is being developed.580

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ECONOMIC AND SOCIAL CONTENTS

Key Issues and Events 155 U.S. Reconstruction Funding for Governance and Economic and Social Development 156 Economic Profile 156 Banking and Finance 160 U.S. Economic and Development Support 167 Essential Services and Development 171 Economic Growth 178 Education 181 Health 184

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ECONOMIC AND SOCIAL DEVELOPMENT

KEY ISSUES AND EVENTS On January 16, 2017, the Afghan parliament passed a 429 billion afghani (AFN, the Afghan unit of currency) budget, or more than $6.4 billion in current dollars for Fiscal Year (FY) 1396, which runs from December 22, 2016, through December 21, 2017. Domestic revenues are to pay for 38% of the budget, with donor assistance covering the rest.581 On March 6, 2017, the International Monetary Fund (IMF) announced a staff-level agreement with Afghan authorities on the completion of the first review of Afghanistan’s three-year economic-reform program. IMF staff found Afghanistan’s performance satisfactory and commended the government for maintaining macroeconomic stability and making progress under challenging circumstances. The agreement is subject to approval by IMF management and the executive board in May 2017. Afghanistan aims to catalyze donor support by successfully completing the program.582 In February 2017, the Financial Action Task Force (FATF) said Afghanistan has substantially addressed the technical requirements of its anti-money-laundering/combating the financing of terrorism (AML/CFT) compliance plan. FATF announced that it expects to visit Afghanistan before June 2017 to monitor whether the required reforms and actions to address deficiencies are being implemented.583 Favorable findings could lead FATF to remove Afghanistan from its list of countries with strategic AML/CFT deficiencies.584 Should that happen, Afghanistan’s international banking relationships could improve. Afghan banks could also become more profitable, as international trade and transaction fees are an important revenue source for them.585 Yet, in March 2017, the State Department again listed Afghanistan as a major money-laundering country whose financial institutions either engage in, or are vulnerable to, transactions involving significant criminal proceeds. State found Afghanistan’s anti-money-laundering laws to be largely in line with international standards, but its supervision and regulatory enforcement is still deficient.586 In late March 2017, President Ghani nominated Nargis Nehan as the new Minister of Mines and Petroleum, and directed parliament to schedule a vote of confidence.587 Nehan became acting minister on April 1.588

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Civil-society organizations welcomed her nomination, which they hope will lead to greater reforms, transparency, and accountability.589 The Ministry of Mines and Petroleum (MOMP) has lacked a permanent minister since March 2016.590

U.S. RECONSTRUCTION FUNDING FOR GOVERNANCE AND ECONOMIC AND SOCIAL DEVELOPMENT As of March 31, 2017, the U.S. government has provided approximately $32.3 billion to support governance and economic and social development in Afghanistan. Most of these funds—more than $19.4 billion—were appropriated to the U.S. Agency for International Development’s (USAID) Economic Support Fund (ESF). Of this amount, $17.9 billion has been obligated, and $15.1 billion has been disbursed.591 U.S.-funded civilian-assistance programs in Afghanistan focus on the country’s long-term development, self-reliance, and sustainability. They aim to bolster gains in health, education, and gender equality. They also seek to increase government revenue through private-sector-led investment and growth, and stronger regional market connectivity.592 Increased revenues would reduce Afghanistan’s heavy reliance on foreign aid donors. ESF investments are made in key sectors like agriculture, extractives, and information technology. ESF programs promote improved governance, rule of law, anticorruption initiatives, and alternatives to illicit narcotics production. The ESF is also being used to help the Afghan government finish and maintain major infrastructure investments to build electric-power grids in the north and south. Grid expansion is a critical component of the United States’ economic-growth strategy for Afghanistan.593

ECONOMIC PROFILE The World Bank reported that past economic and social gains are eroding: poverty, unemployment, underemployment, violence, out-migration, internal displacement, and the education-gender gap have all increased, while services and private investment have decreased. Weak institutions under- mine Afghanistan’s delivery of public services, and along with high levels of crime and corruption, deters private investment.594 The IMF added that Afghanistan’s inadequate infrastructure and human capital, and a large illicit narcotics sector, were also notable elements preventing robust and inclusive economic development.595 The World Bank said Afghanistan will remain aid-dependent beyond 2030.596 Current economic growth remains far below the level required to increase employment and improve living standards, according to the IMF.597 It is being outpaced by Afghanistan’s rapid population growth, estimated at 3% per year. As a result, per capita GDP may be falling, employment

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opportunities are limited, and the budget is pressured. Afghanistan’s labor market is unable to absorb what the World Bank estimates are 400,000 people entering the work force every year. Nearly 23% of Afghanistan’s labor force was unemployed in 2013–2014, per the most recent reporting, almost triple the level of the 2011–2012 years of the Coalition surge with its accompanying spending.598 The Afghan government acknowledged that lower foreign-military spending since the drawdown of the Coalition in 2014 has reduced demand for goods and services, causing large-scale job loss. Meanwhile, the strength of the insurgency has caused the government to spend more on security forces and less on job-creating investments.599 Agriculture has the potential to drive strong economic growth and improve livelihoods, according to the World Bank, and the Afghan government has acknowledged that the country’s GDP rises and falls with it. However, agricultural output and income fluctuate with the weather, so economic growth based on this sector is volatile.600 Industry and services, which benefited from the Coalition’s large presence, security spending, and aid flows prior to 2015, have since grown much more slowly.601 Weak human capital has limited this kind of labor- productivity-driven growth. Therefore, the World Bank predicts that natural resources will continue to play a key role in the economy with new production geographically concentrated around resource locations rather than in cities.602 Afghanistan’s Fiscal Outlook Improving Afghanistan’s fiscal position, according to the World Bank, will require a large increase in revenues, which is plausible only with mining development, and at least sustained levels of aid. While domestic revenues have increased, the World Bank said, so have Afghanistan’s security costs.603 According to DOD, costs for the Afghan National Defense and Security Forces (ANDSF) in FY 2016 were $5.01 billion, of which the United States paid $3.65 billion. DOD expects the FY 2017 ANDSF requirement to cost $4.9 billion.604 For FY 1396 (2017) Afghanistan budgeted AFN 125.2 billion (roughly $1.9 billion) for the Ministry of Interior and Ministry of Defense. Of that, Afghanistan planned to contribute AFN 26.8 billion ($401 million), which would absorb 17.6% of Afghanistan’s total estimated domestic revenues for the year.605 The World Bank said the government’s non-security spending will need to increase rapidly just to sustain current service levels due to population growth, operations-and-maintenance requirements for existing assets, and civil service salaries.606 Afghanistan’s currency, the afghani, has also depreciated significantly, which the World Bank attributes to a decline in aid, the preference of Afghan consumers for the U.S. dollar, and possibly capital outflows

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associated with emigration. The main causes of the out-migration are lack of employment opportunities, increasing poverty, and the deteriorating security environment.607

Afghanistan’s Revenues and Expenditures For the most recent SIGAR analysis of Official Afghan financial data were unavailable this quarter. Updated Afghanistan’s revenues and expenditures Afghanistan Treasury Department reports covering FY 1395–Month 12 (FY 1395–Month 11), see pages 151–154 and the first three months of FY 1396 were not publicly accessible, as of in the January 2017 Quarterly Report to the April 14, 2017.608 The Ministry of Finance’s (MOF) budget directorate did United States Congress. publish a financial report for FY 1395–Month 12. But the report used data from the Afghanistan Financial Management Information System (AFMIS), the country’s government-wide accounting system, dated November 3, 2016, which was 48 days before Month 12 ended.609 AFMIS was temporarily offline this quarter as changes were made to the system. Combined Security Transition Command-Afghanistan (CSTC-A) reported it lost access in December 2016 (toward the end of FY 1395) and said AFMIS upgrades created technical challenges for them that they are still trying to resolve.610 USAID said the MOF inactivated all AFMIS user accounts for FY 1395, but that it had access to FY 1396 reports.611

FY 1396 Budget Approved Donors are expected to finance The Wolesi Jirga, Afghanistan’s lower house of parliament, approved a approximately 62% of Afghanistan’s total national budget for Fiscal Year 1396, which runs from December 22, 2016, FY 1396 national budget, mostly through through December 21, 2017. The AFN 429.4 billion ($6.4 billion) budget grants. This covers approximately 45% includes AFN 268.4 billion ($4.0 billion) for the operating budget and AFN of the operating budget and 89% of the 161.0 billion ($2.4 billion) for the development budget. Expenditures will development budget. focus on security (34% of the total budget), infrastructure (21%), education Source: MOF, National Budget Document, 1396 Fiscal Year, (13%), agriculture (7%), social protection—government pensions, assistance 1/16/2017, pp. 10, 76. to the poor and disaster-affected (6%)—and health (3%).612 The Afghan government projected domestic revenues to reach approximately AFN 152.5 billion ($2.3 billion) in FY 1396. It is relying on taxes, including parliamentary passage and implementation of a 10% value-added tax, increased tariff rates (that are World Trade Organization-compliant), The Extended Credit Facility (ECF): a customs duties, and other fees to accomplish this. Additionally, the budget three-year program that provides financial assumed a 3.8% GDP growth rate in FY 1396 even though the World Bank’s assistance to Afghanistan, as well as other growth estimate in FY 1395 was 1.2% and 1.8% for FY 1396—less than half countries, and is the primary IMF tool for the rate posited in the budget.613 providing medium-term assistance to low- income countries. ECF financial support is generally provided through loans at zero International Monetary Fund Support Agreement Update percent interest rates. On March 6, 2017, IMF announced a staff-level agreement with Afghan authorities on completing the first review of Afghanistan’s economic-reform program—the three-year, $45 million Extended Credit Facility (ECF)—that began in July 2016. The ECF sets out an agenda for Afghanistan that focuses Source: IMF, “IMF Extended Credit Facility,” fact sheet, 3/16/2016. on institution building, fiscal and financial reforms, and measures to combat

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corruption in order to improve private-sector development and more inclusive growth. IMF staff found Afghanistan’s performance satisfactory and commended the government for “prudent macroeconomic management and achieving progress under challenging circumstances.” If IMF management and executive board approve the agreement in May 2017, about $6.1 million will be disbursed to the government.614 Trade Afghanistan continued to pursue regional trade ties this quarter, announc- Afghanistan was the United States’ 93rd- ing a bilateral economic strategy with Uzbekistan, through which both largest trading partner in 2016. U.S. goods countries hope to increase their annual trade from $429 million in 2016 to exports to Afghanistan totaled $913 million. $1.5 billion in 2017.615 Afghanistan’s trade balance was an IMF-estimated Afghan goods exports to the U.S. totaled negative $7.2 billion (equivalent to 36.6% of GDP) in 2015 and negative $34 million. $7.3 billion (equivalent to 39.6% of GDP) in 2016. Afghanistan’s legal exports Source: USTR, “United States and Afghanistan Hold Annual Meeting Under the U.S.-Afghanistan Trade and Investment 616 consist of goods (31.6%) and services (68.4%). However, about 15–20% Framework Agreement (TIFA),” press release, 3/2017. of the total value of Afghanistan’s trade is said to be unrecorded, generally involving smuggled goods, according to the World Bank.617 The U.S.-Afghanistan Trade and Investment Framework Agreement (TIFA) Council met in Kabul, March 27–28, 2017. The U.S. delegation was led by U.S. Special Trade Representative Michael Delaney. The council reviewed trade and investment trends in Afghanistan, the status of key legislative obligations required under World Trade Organization (WTO) rules, and U.S. assistance to Afghanistan in becoming WTO-compliant. The council also addressed concerns raised in the World Bank’s Doing Business 2017 report, as well as challenges, opportunities, and solutions in key Afghan economic sectors. The U.S. delegation presented an overview of the U.S. Generalized System of Preferences (GSP) market-access program, Some of the obstacles to doing business in which allows products from designated countries to be imported into the Afghanistan that were reported in the World United States duty-free, and how Afghanistan could benefit from greater use Bank’s Doing Business 2017 are listed on of the program.618 p. 178.

Export and Import Data Although Afghanistan routinely sustains a large trade deficit, donor aid helped the country maintain an IMF-estimated current-account surplus that was equivalent to 4.7% of GDP ($925 million) in 2015. It fell to 4.5% of GDP ($825 million) in 2016. Without donor assistance, the IMF estimated Afghanistan would have a current-account deficit equivalent to 33.5% of its GDP in 2015 ($6.6 billion) and the equivalent of 36.6% of GDP in 2016 ($6.7 billion).619 During 2013–2015, Afghanistan exported $2.1 billion to $4.0 billion worth of goods and services annually, compared to imports ranging between $8.9 billion and $11.3 billion per year. The IMF had projected Afghanistan’s 2016 exports at $2.1 billion, not including illicit narcotics (valued at $2.7 billion in 2014). Afghanistan’s 2016 imports were projected

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to be around $9.0 billion, with more than $6.7 billion paid for by official donor grants.620 Official statistics for the year had not been published as this report went to press. IMF staff said that Afghanistan needs to increase and diversify its exports, which will stimulate innovation and good management.621 The Afghan government pledged to reduce regulatory and operational barriers to facilitate this.622 Exports depend heavily on agricultural outputs, which the World Bank said can increase if Afghanistan develops supply chains for higher value-added products. This will require investments to develop and improve irrigation and extension services, and to build downstream agro- processing capacities.623 Weather and rainfall would, of course, continue to exert a significant influence on agricultural output and income potential.

BANKING AND FINANCE The World Bank said Afghanistan’s financial sector is challenged by the Loan-to-Deposit Ratio (LTD): a bank’s country’s security environment. It also is affected by “lingering governance gross loans divided by total deposits. LTD concerns, deteriorating asset quality, and weak profitability,” according to “indicates the percentage of a bank’s the IMF.624 The banking sector is dominated by 15 banks—three state-owned, loans funded through deposits. An upswing nine Afghan private-sector, and three foreign-owned branches.625 Public con- in the LTD may indicate that a bank has fidence has not been fully restored in the wake of the 2010 Kabul Bank crisis. less of a cushion to fund its growth and to Bank lending remains low, as shown in the banks’ average loan-to- protect itself against a sudden recall of its deposit ratio of 19.2%. For Afghanistan’s three state-owned banks, that ratio funding, especially a bank that relies on was only 4.6% at the end of 2015.626 In comparison, Pakistan’s commercial deposits to fund growth.” loan-to-deposit ratio was 58.7% and India’s was 78.7% (January 2016); the United States’ was 107.3% (February 2016).627 “Analysts and regulators routinely evaluate Less than 10% of the Afghan population uses banks, according to a State a bank’s ability to repay depositors and Department report; some 90% of financial transactions go through the other creditors without incurring excessive costs and while continuing to fund growth. informal money service businesses (MSB)/hawala system. There is no clear This so-called ‘liquidity’ of a bank is division between MSBs/hawala and formal banking systems—hawaladars evaluated using a whole host of tools and keep bank accounts and use wire-transfer services, while banks occa- techniques, but the traditional loan-to- sionally use hawalas to transmit funds to remote areas in Afghanistan. deposit (LTD) ratio is a measure that often MSBs and hawaladars, which likely account for a substantial portion receives the most attention.” of illegal proceeds moving through Afghanistan’s financial system, are generally not as closely scrutinized by the Afghan government as formal financial institutions.628

Source: Federal Reserve Bank of Minneapolis, “Is the According to the IMF, state-owned banks remain strategically and opera- Loan-to-Deposit Ratio Still Relevant?” 7/1/1998, accessed 4/6/2017, https://www.minneapolisfed.org/publications/ tionally deficient, contributing to significant fiscal risk. While the financial fedgazette/is-the-loantodeposit-ratio-still-relevant. positions of these banks are improving, IMF staff noted that Afghanistan must urgently implement a public-policy framework for them, including enhanced governance and regulatory enforcement.629 The World Bank reported that the quality of commercial and state-owned bank assets continued to deteriorate in the first half of 2016. Commercial- bank loans to the private sector were valued at $740 million in June 2016.

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Most loans were U.S. dollar-denominated, largely the effect of afghani currency depreciation that inflated the value of assets held by commercial Hawaladars: individuals engaged in an banks.630 The World Bank previously attributed Afghanistan’s weak com- informal money transfer system common mercial lending to its overall economic slowdown, low investor confidence, in the Middle East and South Asia. Under stricter implementations of regulations governing foreign-exchange-denom- Afghan law, all operating hawalas are inated loans, and banks’ risk aversion following the Kabul Bank crisis.631 required to be licensed and report their In 2016, the Afghan government declared a dual strategy for financial sec- transactions periodically to DAB. Hawala dealers generally fail to file suspicious tor reform by addressing weaknesses and providing for more robust banking transactions reports as legally required. regulation and oversight. This is to include risk-based audits and reviews,

establishing a unit to monitor risks from state-owned banks, ensuring that Money service providers/businesses: government oversight regulations are appropriate and not duplicative, pro- individuals or entities that engage in funds viding incentives for banks to lend to private enterprises, and a financial transfers, and who may also provide safe- inclusion strategy to improve customer access to banking services.632 keeping and check-cashing services. Money Laundering The State Department lists Afghanistan as a major money-laundering Source: SIGAR 14-16-AR, Afghanistan’s Banking Sector: The country whose financial institutions either engage in, or are vulnerable to, Central Bank’s Capacity to Regulate Commercial Banks Remains Weak, 1/2014, p. 4; State, International Narcotics Control transactions involving significant criminal proceeds, all of which “continue Strategy Report, Vol. II, 3/2017, p. 28. to threaten Afghanistan’s security and development.” Narcotics, corruption, and fraud are major sources of the country’s illegal revenues and laundered funds. State found Afghanistan’s anti-money-laundering laws to be largely in line with international standards, but still deficient and facing significant enforcement and regulatory challenges.633 State reported that Afghanistan’s supervisory and enforcement administration is hampered by corruption, resource constraints, and limited technical expertise. The Financial Transactions and Reports Analysis Center of Afghanistan (FinTRACA), which is tasked with combating money laundering and terrorist financing, has limited ability to identify and build cases against bad actors, even though State considers its new leadership “dynamic and anxious to pursue the organization’s objectives.” When FinTRACA does move money laundering and asset seizure cases forward, the Attorney General’s Office (AGO) has weak prosecutorial capacity to pursue them.634 The United States Department of Treasury (Treasury) identified communication and procedural problems between FinTRACA and the AGO that were negatively impacting AML/CFT compliance. This quarter, Treasury advisors, funded by the State Department’s Bureau of International Narcotics and Law Enforcement Affairs (INL), assessed FinTRACA and the Central Bank’s Financial Supervision Department, documenting improvements and continuing challenges that are listed on page 166. INL said training will be provided for FinTRACA staff to strengthen their analytic capabilities, standard operating procedures, and outreach to stakeholders, with Treasury evaluating the effort.635

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DOJ and Treasury also organized an AML/CFT workshop for relevant Afghan government stakeholders to discuss and clarify organizational roles and responsibilities. Follow-on workshops will continue to address these issues and develop best practices to improve overall implementation.636

FinTRACA Accomplishments in 2016 “Money laundering, tax FinTRACA reported that it revoked the licenses of 80 money-service evasion, corruption and providers (MSPs)—more than 9% of all MSPs in Afghanistan. FinTRACA other practices have domi- also issued 60 warning letters, imposed approximately AFN 4.3 million ($64,102) in fines against MSPs and banks for failure to comply with AML nated 65% of Afghanistan’s laws in 2016, froze 42 bank accounts valued at AFN 25 million ($374,139), financial transactions.” and seized another $240,000. FinTRACA also sent 26 cases to Afghan law- enforcement agencies, three of which went to the AGO.637 Source: Integrity Watch Afghanistan, “Curbing Illicit Financial Flows in Afghanistan,” press release, 4/21/2016. Financial Action Task Force Compliance Update At its most recent plenary session in Paris, France, on February 22–24, 2017, the Financial Action Task Force (FATF) kept Afghanistan on its “Improving Global Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Compliance” document, also known as the “gray Financial Action Task Force: an list.” This means that while Afghanistan has strategic AML/CFT deficien- intergovernmental policy-making body that cies, its government has developed an action plan, made a high-level sets standards and promotes effective political commitment to address those deficiencies, and is making prog- implementation of legal, regulatory, and ress.638 This is the ninth consecutive FATF review in which Afghanistan has operational measures for combating maintained this status since being downgraded to the “dark gray” list in money laundering, terrorist financing, and February 2014.639 other related threats to the integrity of FATF said Afghanistan has substantially addressed the technical require- the international financial system. Its 36 ments of its corrective action plan by introducing frameworks to coordinate members include the United States, United AML/CFT policy and operations, criminalizing money laundering and ter- Kingdom, Switzerland, and the European rorist financing, establishing legal provisions for freezing and confiscating Union; observers include the United terrorist assets, establishing a targeted financial sanctions structure and an Nations and the Asian Development Bank. adequate supervisory and oversight system, improving FinTRACA’s legal status and resources, and developing a cross-border currency declaration system. FATF announced that it expects to visit Afghanistan before the Source: Financial Action Task Force, website, “Who We Are,” and “Members and Observers,” accessed 1/3/2016, http:// June 2017 plenary to monitor whether the required reforms and actions to www.fatf-gafi.org/about/whoweare/ and http://www.fatf-gafi. address deficiencies are being implemented.640 The on-site team’s findings org/about/membersandobservers. will help determine whether to remove Afghanistan from the gray list.641 Treasury said it remains concerned about the government’s ability to implement AML/CFT laws and reform.642 Kabul Bank Theft: Accountability in Name Only The main challenge the Afghan government faces in holding accountable those responsible for the near-collapse of Kabul Bank in 2010 is a lack of political will. As of March 23, 2017, Afghanistan’s Attorney General’s Office (AGO) has still not acted on the 114 Kabul Bank-related cases currently

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referred to it. In a meeting with the U.S. Department of Justice (DOJ) last quarter, the Afghan attorney general said he was disinclined to enforce or pursue current judgments or investigate the Kabul Bank case any further.643 In at least one recent instance, debt-collection efforts were directly undermined when the original judges from the Kabul Bank Special Court, which had been charged with hearing cases connected to the collapse of the bank, were removed at the alleged insistence of a major debtor, and with the help of first Vice-President General Abdul Rashid Dostum. The three replacement judges were then asked to rehear the financial case against the debtor. Two of the judges dismissed the debt; the third dissented, ruling the initial court order was binding.644 Afghanistan established the Kabul Bank Receivership (KBR) to manage the bank’s bad assets (for example, loans that are not being repaid). Afghan officials claim that the KBR director and legal advisor have suggested other debtors use the same new panel of judges to contest their assessed liabili- ties. DOJ predicted that other debtors will do just that if this new court order is upheld.645 These developments directly contravene the letter and spirit of President Ghani’s October 2014 decree requiring the AGO to indict and prosecute all those involved in the approximately $987 million stolen from Kabul Bank, and to monitor enforcement of the courts’ decisions.646 Even if the Special Appellate Court’s original decision in November 2014 and the Supreme Court’s final judgment in December 2014 stand, their vague language makes enforcement problematic, according to the KBR. Many of the properties and other assets purchased with stolen Kabul Bank funds are located in the United Arab Emirates (UAE). But the courts in Dubai, the chief city of the UAE, view the language in the court decisions—particularly regarding the identification and seizure of properties and assets—as “conditional” and lacking “legal certainty or legitimacy.” Last quarter, a KBR representative said the entire judgment/decision is also legally unenforceable in Afghanistan. It is therefore unclear how the Afghan government should address violations.647 The former deputy receiver of KBR also told SIGAR that the AGO’s office has expressed no interest in seeking an enforceable new judgement.648 Some debtors are shielded by their close ties to former and current high- level government officials. The KBR is an administrative entity only, with no authority to investigate, prosecute, or recover debtor defaults. KBR said requests to the AGO and Kabul Bank Clearance Committee for assistance in recovering stolen funds have gone unanswered.649 Additionally, the former deputy receiver told SIGAR that additional recoveries are being impeded, in part because the presidential palace is no longer pursuing this case and the central bank is not properly supervising or exercising control over the Receivership. He also said Afghanistan lacks mutual legal assistance agreements with many of the countries where assets are located, including the UAE.650

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The Afghan government officially requested UAE authorities in September 2016 to “identify, locate, provide documents and records, and conduct a search and seizure of any and all records and balances associated with the bank accounts listed,” but has not received a response, as of March 2017.651 In April 2015, DOJ received a one-page diplomatic note from the Afghan government requesting its assistance in seizing the U.S. bank accounts of two Afghan debtors, presumably ex-Kabul Bank chairman Sherkhan Farnood and CEO Khalilullah Ferozi. In its May 2015 response, DOJ noted several deficiencies in the Afghan request, and outlined the corrective actions needed to move forward. As of March 2017, the Afghan government has not responded or corrected the deficiencies.652 The Afghan government’s approach so far has had no apparent conse- quences, even though the current basis of donor support, the Self-Reliance through Mutual Accountability Framework (SMAF), includes a general “zero-tolerance” policy for corruption and calls for transparent and accountable governance.653 Meanwhile, U.S. government officials have said in meetings with Afghan officials that the United States will hold the Kabul government to its promises to address endemic corruption, including taking action against those responsible for Kabul Bank’s near collapse.654

Cash and Asset Recoveries—A Closer Look On June 19, 2015, President Ghani signed The KBR recovered $200,000 this quarter, bringing “total recoveries”—a a decree allowing SIGAR to help detect category introduced in the last quarter of 2015—to $447.5 million, as of and retrieve Kabul Bank assets in foreign March 19, 2017. As shown in Figure 3.30, total recoveries comprise cash, countries. The decree instructed the AGO, waived interest, and assets recovered or seized (but not necessarily liq- MOF, Ministry of Interior, FinTRACA, and uidated), and collateral, as well as amounts still owed by major debtors Kabul Bank entities to provide SIGAR who signed loan-repayment agreements. Amounts owed by 286 debtors relevant information and documents. FIGURE 3.30 Source: GIROA, Office of the President, Presidential Decree, Serial Number 2736, 6/19/2015.

KABUL BANK DEBT RECOVERIES, AS OF MARCH 19, 2017 ($ MILLIONS)

Cash Recovery 206.2 (+0.5)

Waived Interest by Previous Government 98.2

Assets Sold to Government 50.0

Assets Identi ed in United Arab Emirates 47.0

Agreed Loans Against Collateral 32.0 (-0.3) (Repayment Agreements) Interest Waived by Current Government 14.1 0 50 100 150 200 250

Note: Figures in parentheses represent the change from reported amounts last quarter. Source: Kabul Bank Receivership, “Kabul Bank’s Assets Recovery Brief Report,” 3/19/2017 and 12/17/2016.

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have been paid off. Arrangements have yet to be reached with 122 others (individuals and corporations). The KBR reported $596.9 million remains outstanding from the original theft, including interest.655 These figures are not verified by the U.S. government.656 Until October 2014, soon after President Ghani’s presidential decree to hold accountable and recover stolen public money from those responsible for the Kabul Bank theft, a total of $225.4 million had been recovered or obtained as assets. Since then, only an additional $30.8 million has been recovered in cash; another $32.0 million worth of loan-repayment plans have been agreed to.657 If the reported figures are accurate, less than half of the total loss has been so far recovered in cash—$206.2 million of the $447.5 million total—according to the State Department (State). For the other, non-cash reported recoveries:658 • The $50 million in bank “assets sold to government entities” that was originally recovered by the KBR were transferred or “loaned” by the Karzai government to various ministries and agencies, but not paid for. The KBR has been unable to reclaim the value of these assets from the government, despite numerous requests. • The “agreed loans against collateral” merely represents an agreement by an identified group of debtors to repay their loans. Actual repayments have been limited and many debtors have not kept to the agreed-upon schedule. Less than $13.6 million of the $45.4 million covered by the 19 signed repayment agreements has been repaid; $32.0 million remains outstanding. KBR leadership has reportedly not decided whether to pursue the collateral pledged against these loans. • “Interest waived” by the previous and current governments ($112.3 million collectively) represent accounted-for losses, not cash recoveries. Waivers were given as incentive to enter repayment agreements. • The $47 million in total “assets in the United Arab Emirates” were identified, but have not been recovered. The Dubai courts deem Afghanistan’s court decisions on the Kabul Bank case to have no legal merit.

No money has been recovered this quarter from convicted ex-Kabul Bank chairman Sherkhan Farnood and CEO Khalilullah Ferozi. Their assets are hidden under other people’s names, according to the DOJ. This follows a pattern of the Afghan government’s being unable to compel full repayment from the main architects of the fraud, both of whom are in jail, as of March 2017. According to the KBR, Farnood still owes $336.8 million; Ferozi owes $178.7 million. Both amounts include principal and interest.659 The KBR found an increasing number of debtors defaulting on their required payments in 2016, with collections declining significantly.660 Eighteen of 19 debtors defaulted on their repayment plans this quarter and

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This quarter, Abdul Ghafar Dawi—former are a combined $9.8 million in arrears.661 The IMF reported that the collec- Kabul Bank shareholder and chief executive tions process was “losing steam” with diminishing chances of success for of Dawi Oil Ltd.—was arrested in Kabul and claims against assets located in foreign jurisdictions.662 charged with embezzling millions of dollars from fuel and oil contracts, and with tax U.S. Treasury Assistance to the Ministry of Finance evasion. These allegations were not related The U.S. Treasury’s Office of Technical Assistance (OTA) continued imple- to the Kabul Bank theft, but investigators menting its March 2015 agreement with Afghanistan’s Ministry of Finance did contact the KBR to determine how much (MOF) to develop and execute technical-assistance and capacity-building Dawi paid back and still owes in the Kabul 663 Bank case. programs. OTA conducted two missions to Afghanistan this quarter after an almost year-long delay due to security concerns.664 Source: DOJ, response to SIGAR data call, 3/23/2017; Khaama Press, “Ex-Kabul Bank Shareholder Abdul Ghafar Dawi OTA assistance is focusing on: Arrested in Kabul,” 3/13/2017. • Budgeting: developing baseline budgets and out-year estimates, and reviewing fiscal performance-management-improvement plans.665 OTA worked with MOF counterparts January 31–February 9, 2017, to improve estimating costs of existing and proposed government policies. OTA was asked to return in April to train key MOF staff and pilot ministries on developing new procedures the MOF hopes to incorporate into the 2018 budget process. OTA, with Treasury attaché and USAID assistance, also organized a donor meeting where it discussed the findings of its peer review of the MOF’s fiscal performance- and management-improvement plan, and encouraged similarly constructive feedback to the MOF’s public financial-management team. Following the mission, OTA recommended ways the MOF’s performance management team can address donor concerns as well as survey tools they can use to gather feedback from MOF leadership and staff.666 • Economic Crimes: developing the capacity and effectiveness of Afghanistan’s financial-intelligence unit, FinTRACA, and evaluating the central bank’s capability to supervise money-service providers for compliance with measures against money laundering and terror OTA has carried out eight program- financing. OTA, with funding from State INL, conducted in-depth, assessment missions to Afghanistan, with at least one mission in each of the four on-site evaluations of FinTRACA and the central bank’s financial focus areas. Some OTA assistance to the supervision department March 4–15, 2017. OTA found FinTRACA to MOF has been carried out remotely. Treasury be more effective since its initial assessment in March 2016, adopting reported that security conditions continue protocols to support better analysis. Similarly, the central bank has to be a major constraint on establishing a documented and implemented measures to monitor money service more sustained presence in Afghanistan. providers more effectively. OTA reported that FinTRACA still needs Treasury said the ultimate effectiveness of to enhance its intelligence reports, disseminate them to relevant their efforts will largely depend on a strong stakeholders, and conduct more thorough analyses of their process to and sustained political commitment to investigate suspicious activity. OTA is planning subsequent assistance reform by those Afghan government entities to strengthen FinTRACA’s analytic capabilities, standard operating responsible for public financial management, procedures, and outreach to stakeholders.667 financial-sector strength, and oversight. • Banking: electronic reporting and risk management, and state-bank restructuring (this assistance can be provided from the U.S. Embassy- Source: Treasury, response to SIGAR data call, 3/24/2017 and 12/30/2016. Kabul and remotely). The assessment mission of September 2015 has

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not yet been followed by technical assistance. A mission to Afghanistan is scheduled for April 2017.668 • Revenue: collaborating with the new customs and tax academy in curriculum design, course delivery, and supplying course materials. An assessment mission took place in March 2016; technical assistance has not yet begun.669

U.S. ECONOMIC AND DEVELOPMENT SUPPORT Most assistance from the Economic Support Fund goes toward USAID’s development programs. In September 2015, USAID published an updated Performance Management Plan to guide and measure its development objectives, and to articulate its development strategy through 2018. The plan will be reviewed at least annually and updated as necessary.670 Figure 3.31 shows USAID assistance by sector.

FIGURE 3.31

USAID DEVELOPMENT ASSISTANCE, CUMULATIVE DISBURSEMENTS, AS OF MARCH 31, 2017 ($ MILLIONS)

Infrastructure 4,173 Governance 2,515 Stabilization 2,386 Agriculture 2,086 Unpreferenced* 1,210 Economic Growth 1,174 Health 1,042 Education 907 Program Support 354 $0 $1,000 $2,000 $3,000 $4,000 $5,000

Note: Numbers rounded. Agriculture programs include Alternative Development. Infrastructure programs include power, roads, extractives, and other programs that build health and education facilities. *Unpreferenced funds are U.S. contributions to the ARTF that can be used for any ARTF-supported initiatives. Source: SIGAR analysis of USAID, response to SIGAR data call, 4/9/2017; SIGAR analysis of World Bank, ARTF, Administrator’s Report on Financial Status, as of February 19, 2017.

Development of Natural Resources In late March 2017, President Ghani nominated Nargis Nehan as the new Minister of Mines and Petroleum, and directed parliament to schedule a vote of confidence.671 Nehan became acting minister on April 1.672 Civil- society organizations welcomed her nomination, saying the new minister (if confirmed) would be crucial to amending the mining law, and implementing reforms to provide greater transparency and accountability.673 The MOMP has lacked a permanent minister since March 2016, leading some to criticize the national unity government for not having prioritized this industry.674

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Developing Afghanistan’s natural-resources sector and reforming the fiscal administration for its extractives industries are essential to strengthening domestic revenue collection. However, the security environment, insufficient infrastructure, declining global commodities prices, and inadequate capacity at the MOMP have all hampered the development of this sector. USAID said the MOMP currently cannot administer the approximately 488 existing extractives contracts.675 USAID cited other issues contributing to investor uncertainty: regulations to support implementation of the new mining law enacted in November 2014 are still being developed; amendments to the law and several mineral tenders agreed to in 2010 and 2011 remain unsigned by President Ghani; and a combination of corporate income taxes, export and import duties, production royalties, and other charges constitute an uncom- petitive levy of about 80% on mineral production.676

Revenues from Natural Resources Although geological surveys show that Afghanistan has significant mineral resources, mining has so far contributed only slightly to the country’s GDP.677 Actual government receipts from minerals activity in FY 1394 (2015) were only about 38% of the budget projection.678 In the first 11 months of FY 1395, actual receipts were AFN 1.2 billion (approximately $18.3 million) largely from royalty fees and mineral sales. This was almost double the amount collected in the same period the previous year, and was on track to meet the government’s modest $21 million revenue target for the MOMP in 2016.679 Afghanistan’s FY 1396 (2017) budget revenue target from extractives is a more ambitious $34.8 million.680 Illegal mining at an estimated 1,400–3,000 sites steals non-renewable natural resources, damaging Afghanistan’s economic development.681 The Afghan government believes $300 million in revenue is lost annually by illegal mining, which not only denies Kabul much-needed funds, but also fuels the insurgency and drives criminality.682

Hydrocarbons Afghanistan’s efforts to develop its oil and gas reserves focus on the Amu Darya Basin and Afghan-Tajik Basin, both in northern Afghanistan.683 Afghanistan has only small-scale topping plants—early-stage refineries that can process only limited petroleum components of crude oil—and remains heavily dependent on fuel imports.684 Oil and gas represent roughly one- fourth of all annual Afghan imports, or approximately $1.5 billion.685 Afghanistan’s Sheberghan gas fields hold the potential for cheap natural- gas-generated power that could be competitive with imported power from Uzbekistan, according to the World Bank.686 However, USAID’s implementing partner for the now-completed Sheberghan gas-development project reported that “sufficient levels of proven reserves will likely not be available

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to allow moving forward with large scale power production for at least five to seven years.”687

Mining Investment and Development for Afghan Sustainability Programmatic activities for USAID’s, four-year, $38.7 million Mining Investment and Development for Afghan Sustainability (MIDAS) program ended February 28, 2017, and officially closed out on March 31. No follow- on program is planned at this time.688 MIDAS aimed to strengthen the MOMP’s and Afghan Geological Survey’s capacities to develop Afghanistan’s natural resources by focusing on legal and policy frameworks for the sector.689

Activities This Quarter Since late December 2016, MIDAS consultants’ work had been limited to providing technical and legal support to help the MOMP amend and implement the 2014 Minerals Law. In addition to advising the MOMP on an amendments package this quarter, MIDAS legal advisors completed a review of the financial regulation, updated bidding and explosives regulations, and drafted a natural-gas regulation. A MIDAS advisor also helped the MOMP defend and explain the draft health and safety regulation to the Cabinet. If approved, it will be Afghanistan’s first regulation that directly governs all health and safety aspects of the mining industry.690 All unfinished work was transferred to the MOMP. MIDAS staff spent March 2017 completing final project deliverables, closing out the program. MIDAS has disbursed $33.9 million, as of March 31, 2017.691 Agriculture Agriculture continues to be the main source of real GDP growth, employment, and subsistence for the Afghan population. It accounts for about 22% of GDP, employs 44% of the population, and affects the 61% of Afghans who depend on agricultural activities for their livelihoods.692 The Afghan government said that aside from weather volatility, agricultural growth has been hampered by underinvestment in developing water resources, poor-quality inputs such as seeds and fertilizer, degrad- ing natural resources, and weak domestic- and export-product marketing. The government wants to move from an agrarian-subsistent and importing nation to an agro-industrial exporting one. The government said it will focus on promoting agro-industry, increasing quality control, expanding cold-storage facilities, and introducing better packaging to reduce waste and spoilage—areas that show the largest potential to improve economic growth.693 USAID reported $157.6 million worth of various Afghan agricultural com- Farmers in Badakhshan Province bag modities were sold in FY 2016—compared to $30.55 million sold in FY 2015. red beans harvested after an agricultural- Since 2008, sales of agricultural commodities totaled $531.4 million.694 assistance project. (USAID photo)

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TABLE 3.18

USAID ACTIVE AGRICULTURE PROGRAMS Total Estimated Cumulative Disbursements, Project Title Start Date End Date Cost ($) as of 3/31/2017 ($) Regional Agriculture Development Program (RADP)-South 10/7/2013 10/6/2018 $125,075,172 $85,639,336 Strengthening Watershed and Irrigation Management (SWIM) 11/15/2016 11/14/2021 87,905,437 1,078,852 Regional Agriculture Development Program (RADP)-North 5/21/2014 5/20/2019 78,429,714 33,362,988 Commercial Horticulture and Agriculture Marketing Program (CHAMP) 2/1/2010 12/31/2019 61,294,444 47,732,684 Kandahar Food Zone (KFZ) 7/31/2013 8/30/2018 45,402,467 33,100,000 Regional Agriculture Development Program (RADP)-East 7/21/2016 7/20/2021 28,126,111 1,450,124 Capacity Building and Change Management Program II (CBCMP II) 7/10/2014 7/9/2017 20,874,464 19,657,609 Afghanistan Agriculture Extension Project II (AAEP-II) 10/1/2014 9/30/2017 20,229,771 17,902,819 Grain Research and Innovation (GRAIN) 3/13/2017 9/30/2022 19,500,000 0 Agriculture Credit Enhancement II (ACE II) 6/24/2015 6/23/2018 18,234,849 6,919,528 Strengthening Afghan Agricultural Faculties (SAAF) 3/25/2011 8/31/2017 7,824,209 6,832,374 SERVIR 9/14/2015 9/30/2020 3,100,000 203,912 Program Evaluation for Effective Learning (PEEL) 2/16/2017 10/31/2017 1,475,177 0 Texas A&M University's Agrilife Conflict Development 11/8/2012 11/7/2017 133,976 133,976

Note: Some of the USAID programs listed receive both Alternative Development and Agriculture Development funds. For more information on Alternative Development programs, see pp. 195–197 of this report.

Source: USAID, response to SIGAR data call, 4/9/2017.

USAID Assistance to the Ministry of Agriculture, Irrigation, and Livestock USAID’s agricultural projects are designed to enhance food security, create jobs and export markets, increase incomes and productivity, and strengthen the government’s ability to promote broad-based growth. USAID aims to bolster the Ministry of Agriculture, Irrigation, and Livestock’s (MAIL) “farmer-focused” approach through the production and marketing of high- value horticultural crops and livestock products, the rehabilitation of irrigation and drainage systems, and the greater use of new technologies.695 Since 2002, USAID has disbursed more than $2 billion to improve agricultural production, increase access to markets, and develop income alternatives to growing poppy for opium production.696 Pages 195–197 of this quarterly report discuss USAID’s agriculture alternative-development programs. USAID’s active agriculture programs have a total estimated cost of $518 million and can be found in Table 3.18.

Agricultural Credit Enhancement II The Agricultural Credit Enhancement (ACE) II project is the technical-assistance/advisory-support component of the conditions-based Agricultural Development Fund (ADF) administered by the MAIL. ADF

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extends agriculture-related credit access to small- and medium-sized farms and agribusinesses in all regional economic zones, particularly to those that add value to agricultural products, such as distributors, producers, processors, and exporters.697 USAID reported that with ACE II help, ADF has cumulatively disbursed approximately $83.7 million in loans impacting 37,892 direct beneficiaries, as of February 28, 2017.698 However, ACE II implementers reported that the continuing deterioration of both security and the economy is reducing demand for agricultural credit and negatively impacting loan repayments.699 Agricultural Development Fund staff and clients exhibit Afghan potato varieties in Innovation Grant Fund Uzbekistan. (USAID photo) ACE II continued to engage financial institutions to provide credit financing to the agricultural sector this quarter, in part through an Innovation Grant Fund, which supports developing and testing new ways to facilitate agriculture-related financial services. In July 2016, ACE II awarded the first grant to OXUS Afghanistan, a microfinance organization, to support lending to borrowers in remote districts. The AFN 10.5 million grant (approximately $150,000) was to be used to develop 10 OXUS cashless branches inside Roshan provincial offices using the telecommunications provider’s mobile- money platform for loan disbursements and repayments.700 In January 2017, OXUS entered into a partnership with Etisalat to provide similar services after Roshan abruptly reneged on the agreement in November 2016. Instead of operating cashless branches inside others’ business outlets, OXUS will now lease commercial locations under its own brand and rent space to partners like Etisalat. OXUS opened the first three outlets this quarter—two on the outskirts of Kabul and one in Badakhshan Province—and disbursed $890,000 through eight loans using Etisalat’s mobile-money platform.701 ACE II issued three new Innovation Grant Fund awards this quarter aimed at increasing awareness and access to agricultural credit in rural communities ($148,308); strengthening OXUS’s product development, credit-risk management, and reporting capabilities ($149,313); and supporting efforts to increase awareness of Islamic financing principles and the availability of Sharia-compliant financing for agricultural activities in four provinces ($133,514). Two new grant packages were being finalized this quarter for USAID’s evaluation.702

ESSENTIAL SERVICES AND DEVELOPMENT Since 2002, the United States has provided reconstruction funds to increase the electricity supply, build roads and bridges, and improve health and education in Afghanistan. This section addresses key developments in U.S. efforts to improve the government’s ability to deliver these essential services.

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Power Supply Afghanistan has one of the lowest rates of electrification in the world, with only an estimated 25–33% of Afghans connected to the power grid.703 Over 89% of the population in large urban areas like Kabul, Herat, Kandahar, and Mazar-e Sharif have access to grid connected power (although outages are not uncommon), in contrast to less than 11% of the rural population.704 Afghanistan’s limited domestic electric generation capacity consists of hydropower and diesel sources. The country imports 77% of its total electricity. Of that imported energy, Uzbekistan provides 35.2%, Tajikistan 30.5%, Iran 20.9%, and Turkmenistan 13.4%.705 The World Bank noted that limited access to electricity is one of Afghanistan’s biggest constraints to private- sector development.706 Afghanistan will need regional cooperation to meet its energy demands.707

U.S. Power Sector Assistance USAID believes that economic expansion and increased employment depend on maintaining and improving Afghanistan’s electrical infrastructure. Since 2002, USAID has disbursed more than $1.5 billion in Economic Support Funds to build power plants, substations, and transmission lines, NEPS: imports electricity from the Central and provide technical assistance in the sector.708 USAID is also helping Asian Republics to provide power to Kabul Afghanistan’s national electric utility, Da Afghanistan Breshna Sherkat and the communities north of Kabul. (DABS), to increase electricity supply and revenue generation by improving

sustainability, management, and commercial viability.709 SEPS: draws most of its power from the The Department of Defense has disbursed approximately $180 million for Kajaki Dam and from diesel generators in Kandahar City to provide power in the power projects through the Commander’s Emergency Response Program, Helmand and Kandahar areas. as of July 2015, and roughly $438.8 million through the Afghanistan Infrastructure Fund (AIF), which is jointly managed by DOD and State.710 Afghanistan’s two primary power systems are the Northeast Power System (NEPS) and the Southeast Power System (SEPS). USAID’s ongoing Source: DOD, Report on Progress Toward Security and Stability in Afghanistan, 11/2013, p. 107. effort to connect and increase the electricity supply in both systems is its Power Transmission Expansion and Connectivity (PTEC) project, which aims to construct a transmission line connecting Kabul with Kandahar and build the capacity of DABS to sustain energy-infrastructure investments.711 USAID’s active power-infrastructure projects are listed in Table 3.19.

Kajaki Dam Power—Operations and Maintenance After years of effort, a third turbine, known as Unit 2, was installed in the SIGAR AUDIT powerhouse at Kajaki Dam and commissioned on October 19, 2016. Unit 2 has a power-generating capacity of 18.5 MW. The installation represented a An ongoing SIGAR audit examines U.S. major advance in DABS’s efforts to increase long-term, sustainable hydro- government efforts to increase the power from Kajaki Dam to Kandahar and Helmand Provinces.712 supply, quantity, and distribution of The three turbines now in service at the Kajaki powerhouse have a electric power from the Kajaki Dam. total generating capacity of 50.5 MW, but were operating at a peak level of 49.5 MW this quarter due to reservoir-level constraints. All three turbines

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TABLE 3.19

USAID ACTIVE POWER-INFRASTRUCTURE PROJECTS Total Estimated Cumulative Disbursement, Project Title Start Date End Date Cost ($) as of 3/31/2017 ($) Power Transmission Expansion and Connectivity (PTEC) 1/1/2013 12/31/2018 $725,000,000 $130,995,837 Contributions to the Afghanistan Infrastructure Trust Fund (AITF) 3/7/2013 3/6/2018 153,670,184 153,000,000 Engineering Support Program 7/23/2016 7/22/2019 125,000,000 12,722,675 Kandahar Solar Project 2/23/2017 2/22/2018 10,000,000 - Utility Executive Exchange 9/30/2007 9/30/2017 698,555 698,555 Kajaki Energy Outage Public Relations Campaign 8/22/2016 11/15/2016 55,288 55,288

Source: USAID, response to SIGAR data call, 4/9/2017.

were online this quarter supplying up to 35 MW of power into the 110 kV transmission line and 10–14 MW into the 13.8 kV line.713 It is not known how long this level of power generation will last in the short term.714 Unit 3 is also scheduled to go offline for repairs in 2017, though no timeline for the work was scheduled.715 However, USAID said once upgrades to the 110 kV system are completed in about two years through its SEPS Completion, Phase 2 project, transmission capacity will exceed Kajaki Dam’s power generating capacity.716 USAID-funded technical and operational support, including Kajaki site security, life-support services, and helicopter support to DABS ended March 31, 2017. Of the $22.9 million allocated toward this effort, more than $15.2 million has been disbursed.717 DABS assumed full responsibility for the Kajaki power plant, including operations and maintenance (O&M), starting April 2017 and hired 11 operators to take charge of the powerhouse.718

Power Transmission Expansion and Connectivity Program The U.S.-funded Power Transmission Expansion and Connectivity (PTEC) program was designed to strengthen and expand Afghanistan’s power- generation, transmission, and distribution systems, including funding the 320-mile transmission line between Kabul and Kandahar to connect NEPS with SEPS.719 PTEC’s DABS commercialization and capacity-building components aim to help the utility become financially sustainable by increasing revenues using utility-management software in Kabul, Mazar-e Sharif, Herat, and Jalalabad, while reducing technical and commercial losses through training and support.720 Technical losses include energy lost to line heating and current leakage; commercial losses include customers’ nonpayment of bills and energy theft as by illegally tapping into lines or bypassing meters. Construction on the $104 million transmission line and substations between Arghandi and Ghazni, the first segment of the NEPS-SEPS connector, was delayed this quarter to repair and replace damage caused by fighting between Afghan security forces and the Taliban. The construction

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completion deadline was extended by six months to July 31, 2017, at a cost of $2.5 million. Approximately $80.8 million has been disbursed as of January 31, 2017. Subsequent disbursements are pending National Procurement Authority’s approval of the contract modification.721 The Arghandi connector substation that will feed this line will not be ready until after December 2017. Alternatives to power the Arghandi-Ghazni project are under consideration.722 USAID is providing $330 million in direct assistance to DABS in support of the second segment of the NEPS-SEPS connector, Ghazni Trainees in the Power Transmission to Kandahar—$179.5 million was transferred to USAID through the Expansion and Connectivity Project in Mazar-e Sharif learn about asset manage- Afghanistan Infrastructure Fund. This segment will consist of a 249-mile ment and maintenance. (USAID photo) transmission line and five substations. On February 26, 2017, DABS signed a $113 million contract for the transmission line. The award for the substations has been under protest since September 2016. DABS is still evaluating its options to proceed. USAID said security will be a major challenge to implementing this project.723 For the SEPS Completion, Phase 2, $55 million was transferred to USAID through the Afghanistan Infrastructure Fund to design and construct a transmission line from Tangi to Sangin North and from Maiwand to Kandahar, install electrical equipment, and commission three substations. Funding will be provided on-budget and implemented by DABS.724 On January 21, 2017, USAID issued its consent to execute the transmission-line contract, but neither DABS nor the awardee signed it this quarter. DABS is still evaluating the bid for the substations.725

Power Availability in Kandahar U.S. fuel subsidies totaling $141.7 million for power generation at two industrial parks in Kandahar City ceased at the end of September 2015.726 USAID reported that since then, power output has fallen from the diesel generators in Shorandam and Bagh-e Pol industrial parks. Five generators at Bagh-e Pol, in need of major overhauls and critical spare parts, have stopped altogether; three other generators were transferred to Shorandam to replace units needing scheduled maintenance.727 The Shorandam generators are currently producing 480,000 kilowatt- hours (kWh) per week, which USAID said is insufficient to meet the 1,680,000 kWh estimated weekly electricity demands of the industrial park’s commercial customers. This has reportedly prompted factories to go on strike in January 2017. For other commercial and residential customers in Kandahar, electricity supply is also inadequate.728 Some additional power is being supplied from Kajaki Dam in Helmand Province and diesel generators in Breshna Kot in Kandahar, but USAID said the cost per kilowatt-hour for diesel-generated power is unaffordable for most customers. USAID added that DABS has no business incentive to generate the necessary power if it cannot recover the costs of doing so. This

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results in significant load shedding—the deliberate interruption of power supply to certain areas to align customer load with system output.729 To help bridge the gap between Kandahar’s electric-generation capacities and demand until the NEPS-SEPS transmission line is completed, PTEC funded a reverse auction whereby independent power producers competed to construct and sell power to DABS from a solar-power plant that may be able to operate at an installed capacity of 10 MW. A power-purchasing agreement and contract were signed on February 22–23, 2017.730

Afghanistan Infrastructure Fund Power Projects Afghanistan Infrastructure Fund (AIF) projects were initiated to sup- SIGAR AUDIT port critical counterinsurgency and economic-development objectives in Afghanistan. Although DOD’s mission has since evolved to advising and An ongoing SIGAR audit focuses on assisting Afghan security forces and ministries, as well as counterterror- DOD and State Department progress ism operations, it is still focused on implementing AIF power projects to in completing FY 2011 Afghanistan complete its portion of the NEPS and SEPS.731 Ongoing fighting in Helmand Infrastructure Fund projects, the Province, as well as bureaucratic delays in getting right-of-way approvals impact on other infrastructure priorities for NEPS and SEPS transmission lines, continued to challenge AIF contrac- and counterinsurgency objectives, tors and some project-completion schedules. However, USFOR-A reported and sustainment challenges. More that significant progress was made on right-of-way issues this quarter.732 information is available on p. 214. USFOR-A has completed four AIF power projects so far. All were phases of the now-concluded Kandahar Power Bridging Solution, which provided fuel and technical support for diesel power-generation plants in Kandahar City while turbine-installation work at Kajaki Dam was under way. USFOR-A has six other ongoing power projects, while USAID has three, as shown in Table 3.20 on page 176.733 AIF projects use FY 2011–FY 2014 appropriated funds. No additional AIF money was requested or appropriated in fiscal years following, but up to $50 million from the FY 2016 Afghanistan Security Forces Fund may be used under limited circumstances to help finish existing projects.734 As this report went to press, FY 2017 funding levels had not been finalized. Transportation Afghanistan’s lack of transportation infrastructure hinders internal commerce, foreign trade, and economic growth. The World Bank said Afghanistan’s transportation-infrastructure shortcomings constrain the service and agriculture sectors, which have typically been the leading drivers of the economy. They also hold back the mining industry, the future revenues of which the Afghan government and international donor community are hoping will offset declining international aid.735

Roads Afghanistan has more than 76,400 miles of road, 28,000 of which have been rehabilitated or improved.736 SIGAR auditors assessed the conditions

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TABLE 3.20

AFGHANISTAN INFRASTRUCTURE FUND POWER PROJECTS, AS OF FEBRUARY 22, 2017 ($ MILLIONS) Notified AIF Project Description Amount Obligated Disbursed Status Kandahar Power Bridging Provides fuel and O&M for diesel generators 40.5 39.1 39.1 Complete Solution in Kandahar City SEPS - Kajaki Dam Repair, install transmission lines; rebuild, 130.0 58.3 58.3 Terminated due to out-of-scope security cost increases to Lashkar Gah construct power substations Design, construct transmission lines and Transmission lines 98% complete; substations 96.5% complete; Six NEPS - SEPS Connector, substations (first segment of NEPS-SEPS month extension granted to repair and replace damage from ANDSF- 101.0 104.0g 80.8

AIF FY 2011 Arghandi to Ghazni connection) Taliban fighting and ordering/shipping lags; Cost increase: $2.5 million USAID: PTEC project (completion: 7/2017) NEPS - Arghandi Design, construct transmission line, towers, Transmission line, towers, and substation under construction; commu- 93.7 50.3 33.6 to Pul-e Alam and power substation nity land issues affecting some tower locations (completion: 7/2017)a Kandahar Power Bridging Provides fuel and O&M for diesel generators in 67.0 64.7 64.7 Complete Solution Kandahar City SEPS - Maiwand Design, construct transmission line; rebuild Under construction; tower excavation, tower erection, civil work ongoing 40.0 28.7 19.0 to Durai Junction and construct substations (completion: 6/2017)b NEPS - Pul-e Alam Design, construct transmission line and power Transmission line completed (55 km); substation under construction; 69.2 65.6 c

AIF FY 2012 to Gardez substation security and land issues affecting schedule (completion: 7/2017) 120.0 NEPS - Charikar Design, construct transmission lines and power All towers erected; Transmission line and substation under construction; 39.1 36.2 to Gul Bahar and Nejrab substation no land issues at this time (completion: 7/2017)d Kandahar Power Bridging Provides fuel and O&M for diesel generators in 37.0 34.0 34.0 Complete Solution Kandahar City NEPS - Charikar Design, construct transmission lines and power All towers erected; Transmission line and substation under construction; no 33.0 24.1 23.4 to Gul Bahar and Nejrab substation land issues at this time (completion: 7/2017)d

Civil, structural, architectural improvements to Civil work ongoing (continued delays); Security challenges substations in Tangi, Sangin North and South (completion: 7/2017)e SEPS Completion - Phase 1 75.0 63.1 38.8 Civil work ongoing; transmission towers under construction; community issues

AIF FY 2013 Design, construct, transmission lines from affecting some tower locations; rerouting and schedule modifications under Sangin North to Lashkar Gah review; major security challenges in Sangin (completion: 4/2018)f Design, Construct transmission line and sub- Transmission line contract signed; winning bidder for substations contracts NEPS - SEPS Connector, stations; Final phase of NEPS-SEPS connector 179.5 330.0g 0.0 selected, but protest submitted; DABS evaluating options to proceed Ghazni to Kandahar USAID: PTEC project (completion: 12/2018) Kandahar Power Bridging Provides fuel and O&M for diesel generators in 4.0 3.9 3.9 Complete Solution Kandahar City Design, construct transmission line, and install Transferred to USAID for on-budget implementation through DABS; USAID SEPS Completion - Phase 2 equipment and commission substations. 55.0 55.0 0.0 issued consent for DABS to execute transmission-line contract, but not USAID: PTEC project yet signed AIF FY 2014 Design, construct transmission line and sub- Khowst substation design under review by USACE; right of way under review NEPS - Gardez to Khowst 130.0 121.3 22.2 station; DOD's final contribution to NEPS by MEW; currently no land issues (completion: 6/2018)h

Note: Project completion dates in parentheses reflect the most recent information provided to SIGAR by USFOR-A and USAID, and are subject to change. In some cases, updated completion dates have not been determined. All AIF power projects are to be sustained by Afghanistan’s Ministry of Energy and Water, and Da Afghanistan Breshna Sherkat (DABS), Afghanistan’s national electric utility. Notified amount reflects estimated project ceiling cost. Obligations and disbursements are as of 1/31/2017. All other information is as of 2/22/2017. a 235 of 247 towers completed. Another 11 tower excavations complete. Pul-e Alam substation 48% complete (no change from last quarter). Two of four transformers descoped based on estimated electricity demand and being transferred to Gardez substation. Community land issues stalled 2 towers. The U.S. Army Corps of Engineers (USACE) extended completion date from 12/2016 to 7/2017. Risk of community land or construction issues delaying construction into FY 2018. b 105 of 114 towers completed. Another 4 tower excavations and 4 foundations complete. (No changes from last quarter.) Pushmol and Maiwand substations 70% and 72% complete, respectively. USACE extended completion date from 9/2016 to 6/2017. c Gardez substation 96% complete. Cannot test/commission this segment until NEPS, phase 1 segment is energized to Pul-e Alam. USACE extended completion date from 12/2016 to 7/2017. d 100% of transmission towers erected from Charikar to Gul Bahar; Conductor lines 85% strung. 100% of transmission towers erected from Gul Bahar to Nejrab; Conductor lines 100% strung. Gul Bahar substation 98% complete. No community land issues at this time. USACE extended completion date from 12/2016 to 7/2017. e Tangi substation 73% complete. Sangin North substation 74% complete. Sangin South substation 72% complete. Security issues negatively impacting material deliveries to all sights slowing work progress; Sangin South workers evacuated since 12/31/2016. f Sangin to Durai Junction segment: 83 of 205 towers completed. Another 65 tower excavations and 60 foundations complete. Durai Junction to Lashkar Gah segment: 174 of 212 towers completed. Another 16 tower excavations and 12 foundations complete. Community land issues affecting 8.5% of tower locations (down from 22.6% last quarter); Security issues causing intermittent work stoppages of varying lengths. USACE extended completion date from 6/2016 to 4/2018. g Includes additional, non-AIF USAID funding. h 123 of 268 tower excavations complete. 23 tower foundations complete. USACE extended completion date from 2/2017 to 6/2018.

Source: DOD, OSD-P, response to SIGAR data call, 9/29/2016, 6/29/2016, and 12/28/2015; DOD, OSD-P, response to SIGAR vetting, 1/4/2017 and 7/16/2016; USFOR-A, response to SIGAR data call, 3/24/2017 and 12/22/2016; USFOR-A, response to SIGAR vetting, 4/12/2017; USACE, Garrison and Infrastructure Working Group, AIF LIR, 2/22/2017; USAID, OI, response to SIGAR data call, 3/24/2017, 12/22/2016, and 9/23/2016; USAID, OI, response to SIGAR vetting, 10/11/2016.

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of approximately 1,020 miles of Afghanistan’s U.S.-funded national and regional highways, and found that most were in need of repair and maintenance.737 The World Bank similarly reported that 85% of Afghanistan’s roads are in poor shape; the majority cannot be used year-round.738 Since 2002, USAID has provided more than $2 billion for more than 1,240 miles of road construction, operations and maintenance (O&M), and capacity-building activities.739 DOD provided at least $847 million on 4,687 road-related projects under the Commander’s Emergency Response Program. Despite these investments, SIGAR auditors determined that USAID and DOD have had only limited success in ensuring the long-term sustainability of those roads.740 Afghanistan does not currently have sufficient funding and technical capacity to maintain its roads and highways, according to USAID. Afghanistan is estimated to spend $17 million annually for O&M, but that is $100 million less than the Asian Development Bank says is needed.741 Roads that go without maintenance for a long time can deteriorate to the point where they require complete rebuilding. USAID told SIGAR it would cost an estimated $8.3 billion to replace Afghanistan’s roads if they were not maintained.742 Money aside, a USAID assessment from May 2015 found that the Ministry of Public Works (MOPW) needed structural reform, citing ongoing critical weaknesses, including a lack of skilled staff, poor communication, antiquated systems and processes, and a lack of will to implement necessary reforms. SIGAR recommended that USAID condition future funding for its Road Sector Sustainability Project (RSSP) and for the MOPW on the successful creation of an independent road authority, road fund, and transportation institute in order to boost MOPW’s capacity. USAID concurred.743

Technical Assistance for the Ministry of Public Works Project USAID’s three-year, $25.5 million, Technical Assistance for the Ministry of Public Works (TA-MOPW) project, a component of the Road Sector Sustainability Project (RSSP), aims to improve the capacity and effectiveness of the MOPW to manage Afghanistan’s road network. TA-MOPW is working with Afghan authorities in establishing a road authority, road fund, and transportation institute.744 USAID approved a final transition plan on October 11, 2016, the implementation of which is subject to Afghan Cabinet and Parliamentary approval.745 This quarter, TA-MOPW provided technical advice and support to the Ministry of Justice for its preliminary review of the package of laws and regulations to govern the road authority (RA), road fund (RF) and transportation infrastructure institute (TII). The project team also helped the President’s Office of Administrative Affairs focus on the process of appointing leadership to those agencies. Although the transition plan is still

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pending approval, TA-MOPW is drafting terms of reference for RA, RF, and TII transition teams and technical groups so they can be formed quickly once the Afghan government decides on road maintenance reform proposals.746 Approximately $20.8 million has been disbursed for this program, as of March 31, 2017.747

Afghan officials discuss progress in governance and reforms in a meeting with the Minister of Public Works. (USAID photo)

Afghanistan Infrastructure Fund Road Projects DOD has obligated $62.2 million and disbursed $60.9 million for five road projects under the AIF, as of January 31, 2017. Four road projects, some consisting of multiple phases, have been completed. Only the final 7 km of the Ghulam Khan Transportation Corridor, Phase II remains, as shown in Table 3.21.748

ECONOMIC GROWTH Investor concerns about insecurity as well Afghanistan ranked 183rd of 190 countries in the World Bank’s Doing as the level of Afghanistan’s business- Business 2017 report on regulatory quality and efficiency—a six-place fall enabling environment continued to from 2016.749 While Afghanistan ranks high in starting a business (42nd), a negatively affect investor confidence doubling of the business-receipts tax rate from 2% to 4% in the latter part of this quarter. 2015 made it more costly to do so. Afghanistan is nearly last in dealing with Source: UN, Report of the Secretary General, The Situation in construction permits (186), getting electricity (159), registering property Afghanistan and its Implications for International Peace and Security, 3/3/2017, p. 8. (186), trading across borders (175), and enforcing contracts (180). It is considered the second-to-worst country in protecting minority investors, partly a reflection of the country’s corporate-governance rules and the weakness of its legal institutions.750 In addition to addressing the security challenges that make it difficult to ignite private-sector-led and inclusive growth, the IMF recommended the government eliminate regulatory and administrative barriers for businesses, improve infrastructure, and provide key business services while

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TABLE 3.21

AFGHANISTAN INFRASTRUCTURE FUND ROAD PROJECTS, AS OF FEBRUARY 22, 2017 ($ MILLIONS) Notified AIF Project Description Amount Obligated Disbursed Status

Lashkar Gah to Nawar Road Design, construct 22.5 km road in Helmand Province $22.0 $20.5 $20.5 Complete AIF FY 11

Saracha Design, construct 0.16 km bridge over Chaparhar River, 6.8 6.8 Complete RC-East Border Bridge along Hwy 7 in Nangarhar Province Transportation 35.6 Ghulam Khan Design, construct 24.1 km road, 4 bridges, culverts, Corridor 12.7 12.7 Complete Corridor switchback repairs in Khowst Province Design, construct 7 km road of Salang bypass in Section 6.1 3.0 3.0 Complete Parwan to Bamiyan Province AIF FY 12 Bamiyan Road - 10.0 Design, construct 11 km road of Salang bypass in Section 6 Section 6.2 7.0 7.0 Complete Parwan Province Dahla Dam Phase 2 - Site Realign 4.7 km road along NW shore of Dahla Dam 11.2 7.2 7.2 Complete Preparation (Route Bear Road)

Pavement section inspected; two road Design, construct remaining 7 km road to Khowst city segments turned over to GIROA. Bridge Ghulam Khan Corridor - Phase 2 and 1 bridge to complete Ghulam Khan Transportation 10.0 5.0 3.7 and approaches still in progress

AIF FY 14 Corridor (Completion: 9/2017)

Note: Notified amount reflects estimated project ceiling cost. Obligations and disbursements are as of 1/31/2017. All other information is as of 2/22/2017.

Source: DOD, OSD-P response to SIGAR data call 12/28/2015; USFOR-A, response to SIGAR data call, 3/24/2017; USACE, Garrison and Infrastructure Working Group, AIF LIR, 2/22/2017.

simultaneously strengthening structures for macroeconomic management, the financial sector, and economic governance, not all of which require major funding to carry out.751 USAID has cumulatively disbursed nearly $1.2 billion for economic- growth programs in Afghanistan.752 USAID active economic-growth programs have a total estimated cost of $396.5 million and can be found in Table 3.22 on the next page. Afghanistan Public Financial Management Assistance USAID’s Afghanistan Public Financial Management (APFM) program is the United States’ principal off-budget effort to help strengthen the Afghan government’s ability to generate and collect domestic revenue, manage its budget, and become more fiscally sustainable. The program aims to build the government’s capacity for forecasting revenue, increasing payment compliance, collection, and transfers to the treasury, as well as budget planning, execution, monitoring, reporting, and coordination.753 This quarter, USAID reported that APFM will end seven months earlier than planned due to significant cuts to USAID’s Office of Economic Growth budget. Program activities will cease in September 2017 and APFM will close out on December 27.754

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TABLE 3.22

USAID ACTIVE ECONOMIC-GROWTH PROGRAMS Total Estimated Cumulative Disbursements, Project Title Start Date End Date Cost ($) as of 3/31/2017 ($) Assistance in Building Afghanistan by Developing Enterprise (ABADE) 10/16/2012 4/15/2017 $104,997,656 $101,925,899 Afghanistan Trade and Revenue Project (ATAR) 11/7/2013 11/6/2017 77,754,266 61,468,072 Women in the Economy (WIE) 7/1/2015 6/30/2020 71,571,543 15,046,976 Afghanistan Workforce Development Program (AWDP) Off Budget 4/5/2012 6/30/2018 44,919,458 34,470,891 Multi-Input Area Development-Global Development Alliance 3/23/2013 3/22/2018 30,481,436 16,184,497 Afghanistan Public Financial Management (APFM) 7/27/2015 7/26/2018 22,130,033 10,843,445 Afghanistan Investment Climate Program 3/27/2015 3/26/2020 13,300,000 1,367,909 Commercial Law Development Program 3/1/2014 9/30/2019 10,000,000 6,603,524 Rebranding Afghanistan: Creating Jobs, Changing Perceptions, Empowering Women 11/2/2015 11/1/2018 4,800,000 2,250,000 IFC PIO Grant - Support of Business Environment Reform 10/15/2010 6/30/2016 4,030,000 4,030,000 Strengthening the Revenue Collection Capacity of GIROA 11/30/2014 12/30/2018 4,000,000 1,308,132 E-Government Resource Center II 8/28/2013 12/1/2017 3,900,000 1,205,000 Afghanistan International Bank Guarantee Agreement 9/27/2012 9/27/2020 2,000,000 520,800 Development Credit Authority (DCA) with FINCA, OXUS, and First Microfinance Banks 9/25/2014 9/24/2020 1,953,875 0 Turquoise Mountain Smithsonian Exhibition 3/9/2015 3/31/2017 535,055 503,797 Market Assessment PIO Grant with ITC: Reconnecting Afghanistan to Global Markets 3/2/2017 7/31/2017 53,859 0 Mobile-izing Saving Study 3/2/2015 9/30/2015 50,022 50,022

Note: The Mobile-izing Saving Study explores financial inclusion products to encourage Afghans to build savings. USAID’s Development Credit Authority (DCA) provides partial credit guarantees to mobilize local financing. FINCA, OXUS, and First Microfinance Banks are to use these guarantees to secure loans from larger lenders, and in turn lend to micro and small businesses in Afghanistan. Afghanistan International Bank is to use the DCA guarantee to mitigate its lending risk and facilitate lending to small and medium-size enterprises.

Source: USAID, response to SIGAR data call, 4/9/2017; Innovations for Poverty Action, “Mobile-izing Savings with Defaults in Afghanistan,” 12/8/2015; USAID, Development Credit Authority, “Overview,” 2/2/2015.

In January 2017, APFM began supporting the Ministry of Communications and Information Technology’s (MCIT) implementation of Open Access Policy (OAP) to dismantle Afghan Telecom’s fiber-optic cable monopoly, authorize licensed mobile network operators to lay down fiber-optic cable, auction additional spectrum to facilitate widespread broadband, and tender new licenses. APFM aims for these measures to raise tax and non-tax revenue for the government, while benefitting consumers with better and cheaper service. Although the Afghan government formally approved Open Access Policy on October 3, 2016, it was not implemented. After several stakeholder meetings over the quarter that clarified the legality of mobile operators to upgrade their networks and services under their existing license, they were reluctant to proceed. The APFM advisor reported that a presidential decree is needed.755

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EDUCATION After years of upheaval in the 1980s and 1990s, Afghanistan’s public education system has become one of Afghanistan’s success stories since 2002, according to the World Bank. The number of boys and girls enrolled in school has increased dramatically, as has the number of teachers and schools. However, the education sector faces many challenges. The World Bank reported that only about half of all registered schools in Afghanistan have proper buildings, and only 55% of teachers meet the minimum requirements, with the rest receiving in-service training. While the sector is improving, the quality of education and administration remains weak.756 Continuing security challenges limited access to education in 2016. The United Nations Assistance Mission in Afghanistan (UNAMA) reported 94 conflict-related incidents against either education facilities or education workers in 2016, killing 24 people and injuring 67. UNAMA also documented 42 education facilities that were occupied and used for military purposes, 34 of them by Afghan security forces.757 Ministry of Education Data According to the Education Management Information System (EMIS) for FY 1395 (December 22, 2015–December 21, 2016), Afghanistan report- Education Management Information edly had 15,709 general-education (government-run, grades 1–12) schools, System: a centralized, computerized including 904 inactive/closed schools, with 8.4 million students enrolled.758 network system used to gather school data The number of enrolled students includes both present and absent stu- to support decision making in the Ministry dents.759 The Ministry of Education (MOE) counts students who have been of Education. absent for up to three years as enrolled because, it says, they might return to school.760 In December 2016, Minister of Education Assadullah Hanif Balkhi said that after adjusting school records to deduct registered but per- Source: USAID, Data Quality Assessment of the Ministry of manently absent students, only six million students were actually attending Education’s Education Management Information System, 7/2016, p. 1. classes in Afghanistan.761 Education Management Information System Data To better help the MOE gather school data to guide their decision making— and indirectly understand how donor funding is benefitting Afghanistan’s education system—donors funded EMIS, which tracks critical educational statistics such as the numbers of teachers working and students enrolled. Barriers to data collection have resulted in imprecise and inaccurate EMIS data, increasing donor concerns. To understand the scope of the problem, USAID funded an assessment of EMIS data quality to identify and address gaps in the system.762 Despite its shortcomings and inability to answer key questions, the initial assessment found that EMIS has developed the capacity to manage a nationwide information system. However, there remains a gap between its actual capacity and what is needed to ensure accurate and reliable

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information. Key weaknesses were identified, including lack of oversight, inconsistent monitoring at schools, insufficient capacity and training on EMIS forms and procedures, inadequate financing and overreliance on donor-funded assistance, and lack of coordination resulting in duplicative data collection and inefficiencies.763 A second assessment has been completed; USAID says it is under review.764 School, Teacher, and Student Verification SIGAR is concerned about the extent to which schools purportedly constructed or rehabilitated using U.S. funds exist and are open, operational, and usable. This quarter, SIGAR published the second in a series of reports that presented findings from site visits at schools across Afghanistan. The SIGAR team observed 26 schools in Balkh Province and found some schools lacked basic features including electricity and clean water, and had structural deficiencies. The team also saw indications of student and teacher absenteeism that may warrant investigation by the Afghan government.765 For more information, see pages 43–44. Fourth graders in Bamyan listen as a peer In May 2015, Minister of Education Balkhi admitted to parliament that recites lessons. (USAID photo) some nonexistent schools in insecure provinces received funding, prompting SIGAR to issue an inquiry letter to USAID requesting information regarding the reliability of the data it used to fund, oversee, and measure the effectiveness of its education programs in Afghanistan.766 Soon thereaf- ter, President Ghani ordered an investigation into allegations of corruption at the MOE, but did not release its findings.767 Tolo News obtained and published some results of the investigation, which included allegations of embezzlement, inconsistent and underreport- ing of nonexistent “ghost” schools, thousands of ghost teachers on official payrolls, ghost training seminars, and discrepancies in student enrollment and attendance records.768 A March 2017 Afghanistan Analysts Network (AAN) report said that investigators found it difficult to establish accurate data because MOE departments were providing contradictory figures. Investigators did uncover waste, misuse of resources, and inadequate oversight of school construction projects (for example, 1,033 school buildings were incomplete, but fully paid for) and textbook contracts.769 An investigator told AAN that hundreds of MOE department or section heads were also paid as advisors to the Minister of Education. In other cases, MOE scholarships to study in Europe were awarded to temporary employees who were ineligible for such training. Forty of these temporary employees did not return to Afghanistan. Additionally, the investigation found that MOE assets were either not maintained properly or went missing, including 65 shipping containers used as storage rooms. Senior MOE staff, including a deputy minister, had taken the containers home.770 Notwithstanding findings by SIGAR, the Independent Joint Anti- Corruption Monitoring and Evaluation Committee, and the Afghan

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TABLE 3.23

USAID ACTIVE EDUCATION PROGRAMS Cumulative Total Estimated Disbursements, as of Project Title Start Date End Date Cost ($) 3/31/2017 ($) Afghanistan University Support and Workforce Development Program 1/1/2014 12/31/2018 $91,927,769 $45,115,645 Increasing Access to Basic Education and Gender Equality 9/17/2014 12/31/2019 77,402,457 77,402,457 Afghans Read Program (ARP) 4/4/2016 4/3/2021 69,547,810 5,294,824 Support to American University of Afghanistan 8/1/2013 11/29/2019 64,400,000 30,692,408 Strengthening Education in Afghanistan (SEA II) 5/19/2014 9/30/2020 44,835,920 14,758,497 Basic Education, Literacy, and Technical-Vocational Education (BELT), Textbooks 11/16/2011 6/30/2017 26,996,813 24,891,728 Let Girls Learn Initiative and Girls' Education Challenge Program (GEC) 6/29/2016 6/28/2021 25,000,000 5,000,000 Capacity Building at the Ministry of Education 2/6/2017 2/5/2022 23,212,618 533 Early Grade Reading Survey 7/27/2015 3/27/2017 12,487,469 10,136,102 Assessment of Learning Outcomes and Social Effects in Community-Based Education 1/1/2014 12/31/2017 7,262,016 3,402,997 PROMOTE Scholarships 3/4/2015 3/3/2020 1,247,522 1,247,522 BELT/All Children Reading and Improved Access 7/27/2015 3/27/2017 472,585 462,509

Source: USAID, response to SIGAR data call, 4/9/2017.

government itself, the World Bank-administered Afghanistan Reconstruction Trust Fund sent a letter to donors this quarter addressing corruption allegation in the MOE. The World Bank said its third-party monitoring agent visited 1,237 out of 1,853 school buildings financed by the Fund and found no cases of ghost schools.771 The letter did not address more salient issues of whether the schools were open and being used for their intended purpose, or whether students and teachers were physically present with adequate resources necessary for a suitable learning environment. However, the World Bank did provide donors with the payroll review procedures it said it uses to prevent the inclusion of ghost teachers, which is discussed on pages 128–129.772 USAID Programs USAID aims to improve equitable access to quality education in Afghanistan through community-based classes in remote regions. USAID also seeks to develop relevant, in-demand technical skills to better prepare Afghans for employment. Its programs focus on early-grade reading, textbooks and other learning materials, and raising literacy rates through teacher and educator training.773 USAID had disbursed approximately $907 million for education programs in Afghanistan, as of March 31, 2017.774 USAID’s active education programs have a total estimated cost of $445 million and can be found in Table 3.23.

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HEALTH Afghanistan’s health indicators have improved since 2002, though they remain below average among low-income countries. Afghanistan’s public health is beset by many challenges: tuberculosis, polio, poor maternal health, and one of the world’s highest levels of child malnutrition, according to the World Bank.775 Insecurity also plagues health-delivery services. UNAMA reported 119 conflict-related incidents against either health facilities or health workers in 2016—10 were killed, 13 injured, and 42 abducted. UNAMA also documented 23 medical facilities that were occupied and used for military purposes.776 Afghanistan Demographic and Health Survey Report Released On February 15, 2017, the Afghan government released the final USAID- The 2010 Afghanistan Mortality Survey used funded Demographic and Health Survey (DHS), a nationally representative a sample design that disproportionately June 2015–February 2016 survey designed to provide the Afghan govern- excluded the southern region area, ment with up-to-date, reliable data to help develop modern health and particularly rural, mostly because of security 777 problems. Readers were cautioned to social programs. USAID said the DHS is the commonly accepted “gold consider this when interpreting the study’s standard” of population-based surveys, and utilizes the highest caliber national level and southern zone estimates. data-collection and quality-assurance methodologies. USAID added that Afghanistan’s DHS is comparable to DHS results collected in other coun- A 2017 SIGAR audit on Afghanistan’s health tries. Since survey methodologies have changed over time, however, care sector questioned USAID’s assessment previous Afghan studies are not directly comparable from a statistical mod- of health achievements because it relied eling perspective.778 But cross-country comparisons using the new methods on indicators derived from noncompatible can be made. research approaches—the 2010 Afghanistan Key findings include:779 Mortality Study versus World Health Organization, CDC, UNICEF, Afghanistan’s • a fertility rate of 5.3 births per woman (ages 15–49), on average Health Management Information System, (comparable to Zambia and Senegal) etc.—without disclosing the data limitations • infant mortality of 45 deaths per 1,000 live births (comparable to in that comparative approach. Zambia and Cambodia) • under-5 mortality of 55 deaths per 1,000 live births (comparable to Source: Afghan Public Health Institute, MOPH, CSO, Afghanistan Mortality Survey 2010, 11/2011, p. 10; SIGAR Senegal, Namibia, and Gambia) 17-22-AR, Afghanistan’s Health Care Sector: USAID’s Use of Unreliable Data Presents Challenges in Assessing Program • 16% of children aged 6–23 months having a minimally acceptable diet Performance and the Extent of Progress, 1/2017, pp. 1, 6–7. (comparison not available) • 46% of children receiving all basic vaccinations (comparable to Democratic Republic of Congo and Uganda)

For ever-married women respondents aged 15–49, 53% have experienced physical violence at least once since age 15, and 31% within the year before the survey. Among those who experienced violence within the year before the survey, 26% said it resulted in physical injury. Fifty-six percent reported experiencing emotional, physical, or sexual violence by their spouse, and 52% having experienced it within the year before the survey. Additionally, less than 1% of ever-married women and 4% of men age 15–49 have been

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TABLE 3.24

USAID ACTIVE HEALTH PROGRAMS Total Estimated Cumulative Disbursement, Project Title Start Date End Date Cost ($) as of 3/31/2017 ($) Initiative for Hygiene, Sanitation, and Nutrition (IHSAN) 5/11/2016 5/10/2021 $75,503,848 $1,714,690 Helping Mothers and Children Thrive (HEMAYAT) 1/7/2015 1/6/2020 60,000,000 23,786,035 Health Sector Resiliency (HSR) 9/28/2015 9/27/2020 37,936,471 7,447,178 Strengthening Pharmaceutical System 8/28/2011 7/10/2017 34,399,936 32,731,642 Disease Early Warning System Plus (DEWS Plus) 1/1/2015 12/30/2020 32,728,000 19,788,615 Enhance Community Access, Use of Zinc, Oral Rehydration Salts for 7/21/2015 7/7/2020 15,002,610 4,400,000 Management of Childhood Diarrhea Challenge Tuberculosis 1/1/2015 9/29/2019 15,000,000 4,449,334 Central Contraceptive Procurement 11/1/2011 9/29/2015 13,535,571 13,035,571 Demographic and Health Surveys 9/9/2013 9/8/2018 6,699,863 6,699,863 Sustaining Health Outcomes through the Private Sector (SHOPS Plus) 1/1/2016 9/30/2017 6,000,000 3,000,000 Weekly Iron Folic Acid Supplementation 11/7/2014 12/31/2017 5,610,012 5,408,826 Mothers and Under-Five Nutrition and Child Health (MUNCH) 12/18/2014 6/30/2017 5,000,000 5,000,000 Global Health Supply Chain Quality Assessment 1/2/2015 1/1/2020 1,500,000 1,500,000 Family Planning and Assessment 5/16/2015 6/30/2017 634,833 634,833 Coordinating Comprehensive Care for Children (4 Children) 9/15/2014 9/16/2019 20,000 20,000

Note: The Regional Fortification in the Central Asian Republics and Afghanistan project aims to increase iron, zinc, folic acid and vitamin A nutrient intake by 20% through distribution of fortified wheat and edible oil.

Source: USAID, response to SIGAR data call, 4/9/2017; Global Alliance for Improved Nutrition, “Regional Fortification in the Central Asian Republics,” accessed 1/15/2016.

tested for HIV in the past year and received the test results. Only 9% of women and 33% of men age 15–49 know that using condoms and limiting BPHS: provides primary healthcare sexual contact to one faithful and uninfected partner helps prevent con- services—such as immunizations and tracting HIV.780 prenatal care—at small and rural health clinics, and forms the core of health- USAID Funding and Health Programs service delivery for all primary-care U.S.-funded health-sector programs aim to preserve and enhance gains facilities in Afghanistan.

made since 2002. USAID assistance to the Ministry of Public Health EPHS: outlines the medical services each (MOPH) includes capacity-building, training, and quality-assurance activi- type of hospital in the Afghan healthcare ties to strengthen the ministry’s management and control over healthcare system should provide in terms of general 781 delivery across Afghanistan. USAID believes that the MOPH’s ability to services, staff, equipment, vices, and deliver quality healthcare through the Basic Package of Health Services medications while promoting a health- (BPHS) and Essential Package of Hospital Services (EPHS)—the cor- referral system that integrates the BPHS nerstone of health-service delivery in Afghanistan—is critical to improve with hospitals. health outcomes.782 USAID on-budget assistance to the MOPH provides basic health care and essential hospital services. Off-budget assistance includes activities Source: SIGAR 13-9-AR, Health Services in Afghanistan: Two New USAID-Funded Hospitals May Not be Sustainable and Existing Hospitals are Facing Shortages in Some Key Medical Positions, 4/2013, p. 1.

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to strengthen health systems, engage the private sector, reduce child and maternal deaths, reduce tuberculosis-related deaths, reduce child undernu- SIGAR SPECIAL PROJECT trition, improve the use of modern family-planning methods, and eliminate SIGAR’s Office of Special Projects polio.783 U.S. on- and off-budget assistance to Afghanistan’s health sector issued a report this quarter on totaled more than $1 billion as of March 31, 2017.784 USAID’s active health operating conditions at 30 USAID- programs have a total estimated cost of $310 million, and are listed in Table supported public health facilities in 3.24 on the previous page. Ghazni Province. Not all the facilities visited had access to electricity and Health Sector Resiliency running water, and some had basic USAID’s five-year, $38 million Health Sector Resiliency (HSR) Project structural concerns, but all were open aims to assist the MOPH to strengthen its governance, finance, and and operational. human-resource capacities in anticipation of declining donor assistance. The MOPH leads all project activities, with HSR acting as technical advisor, as the ministry considers and implements critical reforms to make Afghanistan’s health system more efficient, sustainable, and self-reliant.785 HSR conducted several provincial health-office assessments between October and December 2016, the most recent period reported. These included reviews of finance and procurement systems in five provinces to determine legal and regulatory compliance, capacity development needs, and levels of input into national budget and procurement planning. Post- assessment plans were developed to address identified needs in areas such as human resource and departmental management, organizational governance, and accountability. HSR also finalized an advocacy plan for increased domestic funding for the health sector, and began efforts to demonstrate the health, economic, political, and social returns on the government’s investment.786

Polio Afghan religious leaders and scholars are Afghanistan reported three new polio cases in 2017, as of April 5, most attempting to counter misinformation by recently in Kunduz Province. There were 13 new polio cases in 2016.787 forming the National Islamic Advisory Group Afghanistan and Pakistan, which share a 1,500-mile border, are two of only for Polio Eradication in 2016, which called three countries where polio is still endemic.788 Large-scale population move- on all Afghans to vaccinate their children. ments between Afghanistan and Pakistan increase the risk of cross-border Source: Global Polio Eradication Initiative, “Staying the Course transmission and complicate vaccination outreach.789 on the Long Road,” 2/7/2017. Security and access challenges constrain vaccination campaigns in some areas. Taliban splinter groups, Islamic State-Khorasan Province, and the Haqqani Network continue to oppose vaccination efforts. They attack polio workers and refuse to allow immunization campaigns in areas under their control. Workers must also contend with misinformation that polio- immunization campaigns are American conspiracies, that immunization volunteers are spies, and that the polio vaccine is an anti-fertility drug or has side effects.790 USAID reported that the Afghan Government has strengthened polio eradication cooperation and improved program quality.791 On April 3, 2017,

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Chief Executive Abdullah Abdullah, third from left in front row, inaugurates the Center for National Polio Emergency Eradication Operations in Kabul. (Ministry of Public Health photo)

the government inaugurated a Center for National Polio Emergency Eradication Operations in Kabul to be used for coordinating, organiz- ing, planning, and conducting polio eradication program activities.792 This center, along with three regional ones and a network of 7,000 community mobilizers, aim to improve vaccination by engaging communities, as well as religious and traditional leaders. As a result, USAID said the number of children not immunized because of security issues declined from 324,000 in May 2016 to 99,000 in March 2017.793 USAID obligated more than $25.7 million and disbursed about $14.5 million for polio eradication in Afghanistan since FY 2003.794

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COUNTERNARCOTICS CONTENTS

Key Issues and Events 189 U.S. Reconstruction Funding for Counternarcotics 190 Interdiction and Eradication 191 Alternative Development 195

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COUNTERNARCOTICS

KEY ISSUES AND EVENTS Despite a U.S. investment of $8.5 billion to counter Afghanistan’s illicit narcotics economy, Afghanistan remains the world’s largest opium producer and exporter—producing an estimated 80% of the world’s heroin. The narcotics industry—coupled with rampant corruption and fraud—is a major source of illicit revenue.795 In December 2016, the commander of U.S. and NATO forces in Afghanistan, General John W. Nicholson Jr., said the opium trade provides about 60% of the Taliban’s funding.796 According to the Department of State’s Bureau of International Narcotics and Law Enforcement Affairs (INL), a symbiotic relationship exists between the insurgency and narcotics trafficking. Traffickers provide weapons, funding, and material support to the insurgency in exchange for protection, while insurgent leaders traffic drugs to finance their operations. U.S. Special Operations service members Production and trafficking of illicit narcotics flourish in areas where Afghan board two UH-60 Black Hawk helicopters state institutions are weak, although trafficking is not limited to insurgent- following a counternarcotics operation controlled areas. The narcotics trade also undermines governance and rule in Kandahar province. U.S. Special of law throughout Afghanistan.797 Forces advised and assisted specialized According to the United Nations Office of Drugs and Crime (UNODC), Afghan police units during multiple counternarcotics operations this year. approximately 201,000 hectares of land in Afghanistan were under poppy (DOD photo) cultivation in 2016 (a hectare is slightly less than 2.5 acres). That was an increase of 10% over the previous year’s total and a 43% increase in potential opium production. According to INL, poppy cultivation remained near historically high levels compared with the past several decades.798 While U.S. heroin mainly comes from Mexico, Afghan heroin does make up the majority of heroin consumed in Canada and the rest of the world.799 UNODC says poppy eradication results in 2016 were the lowest this decade at 355 hectares—a 91% decrease from 2015. Though cultivation decreased 7% in Helmand—the country’s main opium poppy-cultivating province—and 3% in Kandahar, it increased significantly in others, notably 184% in Badghis. The number of poppy-free provinces decreased from 14 to 13, with Jowzjan losing the poppy-free status regained in 2008.800 Moreover, final approval of the U.S. government’s revised counternarcotics strategy has been postponed until the new Administration endorses the new strategy.

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Afghanistan also suffers from widespread illegal drug use. A 2015 Afghanistan National Drug Use Survey conservatively estimated that roughly 11% of the population tested positive for one or more drugs, including 5.3% of the urban population and 13% of the rural population. Drug use among women and children is among the highest documented worldwide, and 30.6% of households tested positive for some form of illicit drug.801 In addition, a January 2017 UNODC report found that the availability of synthetic drugs such as methamphetamine has increased in Afghanistan; there were 153 seizures between March 2014 and March 2015, compared to only two between March 2011 and March 2012.802 INL noted that the Afghan government recognizes the negative impact of illegal drugs and has taken steps to address the problem, but the Afghan government has been slow to implement the National Drug Action Plan (NDAP) it adopted in 2015. Moreover, the Afghan government will require ongoing financial and technical assistance from the international community if it is to achieve the NDAP’s objectives.803

U.S. RECONSTRUCTION FUNDING FOR COUNTERNARCOTICS As of March 31, 2017, the United States has provided $8.5 billion for counternarcotics efforts in Afghanistan since 2002. Congress appropriated most counternarcotics (CN) funds for Afghanistan through the DOD Drug Interdiction and Counter-Drug Activities (DOD CN) Fund ($3 billion), the Afghan Security Forces Fund (ASFF) ($1.3 billion), the Economic Support Fund (ESF) ($1.6 billion), and a portion of the State Department’s International Narcotics Control and Law Enforcement (INCLE) account ($2.2 billion).804 ASFF is primarily used to develop the Afghan National Army and Police, including the Counter Narcotics Police of Afghanistan (CNPA) and the Special Mission Wing (SMW), which support the counternarcotic efforts of the Ministries of Defense (MOD) and Interior (MOI).805 USAID’s ESF-funded alternative-development programs are intended to support U.S. counternarcotics objectives by helping countries develop economic alternatives to narcotics production. In addition to reconstruction funding, the DEA receives funds through direct appropriations to operate in Afghanistan.806 SIGAR will issue a Lessons Learned Program report later this year that will examine U.S. counternarcotics efforts since reconstruction began. This comprehensive review will incorporate satellite-imagery data analysis and provide recommendations to policymakers to improve future strategies and programs.

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INTERDICTION AND ERADICATION The U.S. and Afghan governments use both interdiction and eradication to counter the cultivation and production of illicit narcotics in Afghanistan. According to the Department of State:807 Drug interdiction—or preventing illicit drugs from reaching their destination—is important in stemming the flow of illegal drugs and countering the negative effects of organized criminal groups. INL supports interdiction efforts through training, equipping, and providing technical assistance to partner nation law enforcement agencies. Such efforts increase the capacity to detect, investigate, disrupt, and seize shipments of illicit drugs and the chemicals (known as precursors) needed to process and produce drugs. Eradication—or the physical destruction—of illicit crops remains an important tool for decreasing the production of illegal drugs and preventing them from entering the United States, or other drug markets. INL provides training, equipment, and technical assistance to foreign governments to support their own eradication programs, and address related counternarcotics and law enforcement challenges. Interdiction Results In Afghanistan, INL partners with the Drug Enforcement Administration (DEA) and DOD to build the capacity of the Counter Narcotics Police of Afghanistan (CNPA), with particular focus on support for two specialized units mentored by DEA: the Afghanistan Sensitive Investigative Unit (SIU) and the Afghanistan National Interdiction Unit (NIU).808 The poor security situation in Afghanistan makes interdiction a challenge. However, during the second quarter of fiscal year (FY) 2017 (data available January 1 to March 22, 2017) interdictions rose approximately 60%, from 33 to 53 operations, over the previous quarter, which DOD attributes to the mentorship of U.S. Special Forces units, greater access to RS mission support, and improving interoperability.809 Most interdiction activities occurred in the capital and eastern regions and included routine patrols, cordon and search operations, vehicle interdictions, and detention operations. These operations resulted in both seizures of illicit narcotics and the destruction of multiple drug labs.810 According to DOD, Badghis Province has emerged as the second highest poppy producing province, after Helmand, in part due to a lack of security and counternarcotics forces in the province. Badghis Province’s role in the drug trade is mainly limited to cultivation and trafficking.811 NIU operations increased and were primarily conducted in Helmand, Kabul, and Nangarhar Provinces. During the second quarter of FY 2017, specialized Afghan CN units, alongside U.S. and Afghan Special Forces, targeted major drug-trafficking organizations in Helmand and Nangarhar Provinces. Recent partnering with U.S. Special Forces has resulted in an

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 191 COUNTERNARCOTICS

increase in the number of labs destroyed and drugs interdicted. However, DOD noted that continued mentoring by Coalition partners would likely be required to maintain the current level of operations.812 According to U.S. Forces-Afghanistan (USFOR-A), the February 2016 assignment of a Resolute Support advisory team to Afghan counternarcotics forces has increased the number of successful CN missions. In the second quarter of FY 2017, the Resolute Support advisory team supported Precursor chemical: a substance that may successful missions by NIU, resulting in seizures of narcotics, precursor be used in the production, manufacture, chemicals, and drug-production equipment. For example:813 and/or preparation of narcotic drugs and • January 1, 2017, U.S. Special Forces advised and assisted the NIU, psychotropic substances. SIU, and Special Mission Wing (SMW) during operations in Nangarhar to deny and degrade funding for insurgents and narco-terrorists. The mission yielded 10 kilograms (kg) of pure processed heroin, 21 fifty-five-

Source: UNODC, “Multilingual Dictionary of Precursors and gallon drums of heroin, 100 kg of ammonium chloride, one opium press, Chemicals,” 2009, viii. one opium cauldron, and two SKS rifles. This operation is estimated to have denied $1.7 million to insurgents/criminals. • January 10, 2017, U.S. Special Forces working with the MOD advised and assisted the NIU, SIU, and Afghan special forces during an operation in Farah Province. This mission yielded 12 kg of crystalized heroin, 500 kg of raw opium, 1,810 kg of ammonium chloride, 1,020 liters of acetic anhydride, 860 kg of soda ash, five opium presses, 129 opium cooking barrels, and three generators. This operation is estimated to have denied $5.8 million to insurgents/criminals. • January 26, 2017, U.S. Special Forces advised and assisted the NIU, SIU, and Afghan special forces to clear six compounds in Helmand Province. This mission resulted in six enemies killed in action and the seizure of 1,090 kg of morphine base, 15,175 kg of ammonium chloride, 11 opium presses, 12 opium cauldrons, 277 cooking barrels, and two enemy vehicles. This operation is estimated to have denied $3.9 million to insurgents/criminals. • February 23, 2017, U.S. Special Forces advised and assisted the NIU, SIU and Afghan special forces during operations in Nangarhar Province. The mission yielded 1,650 kg of morphine base, 100 kg of hashish, 500 kg of opium seeds, 60 liters of acetic acid, 1,000 kg ammonium chloride, one opium press, and one opium cauldron. This operation is estimated to have denied $4.7 million to insurgents/criminals.

SIGAR has long tracked DOD and DEA reporting on the results of interdiction operations in Afghanistan. As shown in Table 3.25, from 2008 through March 22, 2017, 3,371 interdiction operations have resulted in the seizure of 449,470 kg of opium. However, this result was less than 1% of Afghanistan’s opium production. According to the December 2016 Opium Survey by the United Nations Office on Drugs and Crime (UNODC), Afghanistan’s potential opium production was approximately 4,800 metric tons (or 4.8 million kg) in 2016 alone.814

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TABLE 3.25

INTERDICTION RESULTS, FISCAL YEARS 2008–2017

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* TOTAL Number of Operations 136 282 263 624 669 518 333 270 190 86 3,371 Detainees 49 190 484 862 535 386 442 394 301 92 3,735 Hashish seized (kg) 241,353 58,677 25,044 182,213 183,776 37,826 19,088 24,785 123,063 227,460 1,123,285 Heroin seized (kg) 277 576 8,392 10,982 3,441 2,489 3,056 2,859 3,532 1,799 37,403 Morphine seized (kg) 409 5,195 2,279 18,040 10,042 11,067 5,925 505 13,041 47,845 114,348 Opium seized (kg) 15,361 79,110 49,750 98,327 70,814 41,350 38,379 27,600 10,487 18,292 449,470 Precursor chemicals 4,709 93,031 20,397 122,150 130,846 36,250 53,184 234,981 42,314 55,637 793,499 seized (kg)

Note: The significant difference in precursor chemicals total seizures between 2014 and 2015 is due to a 12/22/2014 seizure of 135,000 liters of precursor chemicals. *Results for period 10/1/2015–3/22/2017.

Source: DOD, response to SIGAR data call, 7/29/2015, 12/23/2016, and 3/22/2017.

Eradication Results The UNODC’s 2016 Afghanistan Opium Survey noted that poppy eradication declined significantly in 2016, with only 355 hectares of opium poppy fields destroyed (compared to 3,760 hectares in 2015, 2,692 in 2014, and 7,348 in 2013).815 When compared to the UNODC-estimated 201,000 hectares of poppy being cultivated in 2016, eradication is nearly imperceptible, as shown in Figure 3.32 on the next page. Deteriorating security conditions, a lack of political will, and the Afghan Ministry of Counter Narcotics’ ineffective management all contributed to the paltry eradication results in 2016.816

Governor-Led Eradication Program The United States supports Afghan-led eradication efforts through INL’s Governor-Led Eradication (GLE) program that reimburses provincial governors $250 per every UNODC-verified hectare of eradicated poppy.817 GLE is the only eradication program financially supported by the U.S. government; annually it accounts for less than 2% of INL’s Afghanistan CN budget.818 According to financial data provided to SIGAR, INL has obligated more than $5.6 million and expended nearly $4.7 million for the GLE program.819 Ministry of Counter Narcotics Capacity-Building Since 2008, INL has obligated $35.2 million and expended $26.0 million on building the capacity of the Afghan Ministry of Counter Narcotics (MCN).820 In mid-July 2015, INL conducted an independent risk assessment of the MCN’s public financial-management system. The report identified significant deficiencies that increased the potential for inaccurate financial reporting, inefficiency, ineffective operations, and noncompliance with laws and regulations. Areas of particular concern were internal controls, program management and monitoring, and facility management.821

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FIGURE 3.32

AFGHAN OPIUM CULTIVATION, ERADICATION, AND PRODUCTION SINCE 2008

HECTARES TONS

250,000 10,000

224 200,000 209 8,000

6,000 150,000 157 154 131 123 123 100,000 4,000

50,000 2,000

0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016

Opium cultivation (HECTARES) Eradication (HECTARES) Opium production (TONS)

Source: UNODC, World Drug Report 2016, Annex, 6/2016, vii, ix, xii; UNODC, Afghanistan Opium Survey 2016: Cultivation and Production, 12/2016, p. 6.

Based on recommendations in the risk assessment, in mid-2016, INL solicited and awarded a contract for a financial-remediation plan that was expected to be completed in 2016.822 However, that original schedule changed “following delays in solicitation.” According to INL, the financial- remediation plan was still “on schedule,” per the terms of the contract, as of March 24, 2017.823 INL said it was too early to measure improvements as a result of the financial-remediation plan. The contractor, the Afghanistan Holding Group, is currently developing standard operating procedures for the implementation of effective financial controls.824 Successful remediation is expected to permit the MCN to receive direct assistance funds.825 In mid-2016, INL solicited and awarded a grant to improve English and information-technology (IT) skills at the MCN.826 According to INL, this quarter, more than 100 students were taking IT-skills training classes twice a week. However, English training was put on hold due to the lack of class- room space. In addition, six fellows from the Asia University for Women were continuing their fellowship at the MCN.827

Good Performers Initiative The INL-funded Good Performers Initiative (GPI) was a program that sought to incentivize provincial governors’ counternarcotics and supply- reduction activities by supporting sustainable, community-led development projects in provinces that significantly reduced or eliminated poppy

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cultivation. From June 2012 to April 2016, INL funded GPI projects on-budget through the Afghan Ministry of Finance. However due to technical-capacity issues at the MCN, INL phased out the GPI program. No new GPI projects were approved after April 30, 2016; however, INL will continue to fund ongoing projects until their completion.828 As of February 28, 2017, INL reported that 286 projects valued at $126.4 million had been contracted. Of those, 233 projects have been completed and 53 are still in progress.829 INL is also working on an alternative-development project—called the “Strengthen and Diversify Licit Livelihoods through Alternative Development Interventions” project—that is expected to follow through on INL’s commitments to those provinces most affected by the cancelling of the GPI program.830

ALTERNATIVE DEVELOPMENT USAID’s alternative-development (AD) programs support U.S. counternarcotics objectives by helping host countries to develop economic alternatives to narcotics production. INL funding supports supply-reduction and alternative-development programs. INL told SIGAR it holds biweekly meetings with USAID to coordinate their AD efforts and ensure that INL AD efforts complement and leverage ongoing USAID activities.831 According to USAID, both agencies also jointly attend AD program meetings with UNODC, the UN Development Programme (UNDP), the MCN, and the Ministry of Agriculture, Irrigation, and Livestock.832 INL has been implementing AD programming in Afghanistan since 2007 through GPI and a series of grants with the Aga Khan Foundation to strengthen subnational governance and alternative livelihoods. INL AD programs target high poppy-cultivating areas, in line with Afghan government priorities laid out in Afghanistan’s National Drug Action Plan.833 Strengthen and Diversify Licit Livelihoods Through Alternative Development Interventions As of March 10, 2017, INL has obligated $20 million for its “Strengthen and Diversify Licit Livelihoods through Alternative Development Interventions” project. The project, implemented by UNODC, started in August 2016 and is scheduled to end in 2020.834 The project will support and strengthen selected value chains in production, processing, quality control, and market linkages across 14 target provinces that were most impacted by the loss of GPI award funds or that had very high levels of poppy cultivation.835 According to INL, this quarter, UNODC finalized district and community selection criteria and have prepared a list of communities in target districts. UNODC also developed questionnaires for a socioeconomic survey,

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developed plans for 20 small-scale projects, and is developing plans for some large-scale projects.836 Community-Based Agriculture and Rural Development As of March 10, 2017, INL has obligated $17.8 million for its Community- Based Agriculture and Rural Development (CBARD) project.837 The program—implemented by UNDP and UNODC—aims to improve house- hold income while reducing dependency on illicit poppy cultivation for selected communities in Farah and Badghis Provinces, the second and sixth highest poppy-cultivating provinces in 2016, according to UNODC.838 According to INL, CBARD will improve the local production and marketing of high-value crops. The project will also develop and strengthen community-based business infrastructure, such as irrigation, transportation, and facilities. The project is scheduled to end in 2020.839 According to INL, this quarter, UNDP and its implementing partner developed draft criteria for identifying beneficiary communities and farmers. UNODC developed questionnaires for a socioeconomic survey. In March, INL provided $2.2 million to UNODC and $356,400 to UNDP to conduct surveys of its programs and assessments for future programs. UNODC and UNDP are expected to use the new funding to survey additional communities and conduct assessments that will include information on off-farm employment and access to finance.840 Kandahar Food Zone The Kandahar Food Zone (KFZ) is a $45.4 million, USAID-funded project implemented by International Relief and Development (IRD). KFZ addresses the drivers of poppy cultivation in Kandahar Province by rehabilitating irrigation infrastructure, expanding alternative livelihood opportunities, supporting small businesses, and building the capacity of the MCN to develop effective alternative-development policies. The project started in 2013 and is scheduled to end in August 2018.841 According to USAID, during the first quarter of FY 2017, KFZ made no progress toward two “impact indicators”: increasing the number of hectares of improved high-value crops (the FY 2017 goal is 350 ha) and increasing the percentage of households reporting an increase in income from licit livelihoods in targeted areas (the goal is 10%). No progress was made during the first quarter of 2017 toward 19 of 24 other indicators, including the number of farmers receiving public or private sector training and the number of hectares under cultivation of high- value crops as a result of U.S. government assistance. However, according to USAID, “KFZ has done preparatory work regarding progression toward the achievement of indicators in upcoming quarters of FY 2017. Therefore, there has been very limited progress toward tangible achievement of indicators during this reporting quarter.”842

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During the first quarter of 2017, the KFZ project rehabilitated 199 km of irrigation canals and 350 hectares of perennial crops, established 70 hectares of new orchards, and shipped 6,000 tons of fruit to national markets and 4,000 tons to international markets. In addition, the project improved Afghan government irrigation management and increased government engagement with rural communities.843 Regional Agricultural Development Program USAID’s Regional Agricultural Development Program (RADP) is intended to help Afghan farmers achieve more inclusive and sustainable economic growth. RADP projects are under way in the southern, eastern, and northern regions of Afghanistan. The projects focus on strengthening the capacity of farmers to improve the productivity of high-value crops and livestock. Using a value-chain approach, these projects work with farmers and Value chain: the range of goods and agribusinesses to overcome obstacles hindering production, processing, services necessary for an agricultural sales, and overall development of agricultural value chains.844 product to move from the farm to the final RADP-East (RADP-E) is a USAID-funded $28.1 million program designed customer or consumer. It encompasses the to expand sustainable agriculture-led economic growth in the provinces of provision of inputs, actual on-farm produc- Ghazni, Kapisa, Laghman, Logar, Nangarhar, Parwan, Wardak, and Kabul. tion, post-harvest storage and processing, RADP-E works with the private sector to identify constraints to business marketing and transportation, and wholesale and retail sales. and value-chain performance, and implement market-based solutions.845 RADP-E started in 2016 and expected to end in 2021.846 As of March 22, 2017, approximately $1.4 million had been expended.847 According to USAID, this quarter, RADP-E continued its efforts in pre- Source: USAID, response to SIGAR vetting, 4/12/2015. paring for its implementation phase. This included completing various studies, surveys, and analyses, as well as collecting information from relevant stakeholders.848 RADP-North (RADP-N) is a USAID-funded $78.4 million program that started in 2014 and is scheduled to end in May 2019. RADP-N invests in increased sustainability and profitability of select value chains—wheat, high-value crops, and livestock—in rural areas of Badakhshan, Baghlan, Balkh, Jowzjan, Kunduz, and Samangan Provinces.849 As of March 22, 2017, approximately $33.4 million had been expended.850 RADP-South (RADP-S) is a USAID-funded $125 million program that started in 2013 and is scheduled to end in October 2018. RADP-S promotes inclusive and sustainable economic growth for rural Afghans in Kandahar, Helmand, Uruzgan, and Zabul Provinces. The program supports farmers and micro, small, medium, and large agribusinesses to improve production, processing and commodity sales. RADP-S strengthens market systems by using local agricultural firms to champion reforms. RADP-South is working to increase the incomes of farmers, agribusinesses, and veterinary profes- sionals, while raising awareness among farming families of proper nutrition and balanced diets.851 As of March 22, 2017, approximately $83.4 million had been expended.852

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RADP-West (RADP-W) was a USAID-funded $27.7 million program that started in 2014 and ended in September 2016. RADP-W was a Ministry of Agriculture, Irrigation, and Livestock (MAIL)-led program designed to improve food and economic security for rural Afghans in certain districts in the western provinces of Herat, Farah, and Badghis. The program supported the ministry’s efforts to improve the productivity and profitability of targeted value chains. The program supported initiatives to train and mentor farmers and agribusinesses in the use of appropriate technologies and agricultural practices, post-harvest and value-added processing, and strengthening linkages to domestic and international markets. The program also supported the ministry in efforts to adopt longer-term improvements in national agricultural policy and regulatory development.853 As of March 22, 2017, approximately $27.1 million had been expended.854

An Afghan trader pours juice samples at Commercial Horticulture and Agricultural Marketing Program a food exhibition in Dubai, February 27, The Commercial Horticulture and Agricultural Marketing (CHAMP) 2017. (USAID photo) program is a USAID-funded $61.3 million program designed to boost agricultural productivity and food security, provide market opportunities, and decrease poppy production.855 The program started in 2010 and is scheduled to end in December 2019.856 According to USAID, the program has helped export 51,700 tons of produce valued at $55 million to markets in Pakistan, Canada, India, the United Arab Emirates, and Russia. In addition, USAID said the program created more than 7,700 agribusiness jobs, trained 112,500 farmers, and benefitted 38,400 households.857 Drug-Demand Reduction A 2015 Afghanistan National Drug Use Survey conservatively estimated that roughly 11% of the population tested positive for one or more drugs, including 5.3% of the urban population and 13% of the rural population. Drug use among women and children is among the highest documented worldwide and 30.6% of households tested positive for some form of illicit drug.858 The United States is helping Afghanistan face this public-health crisis by funding a new rural treatment program to expand substance abuse treatment to the hardest hit local communities. According to INL, the demand for treatment and prevention services far exceeds the capacity of the centers, most of which have extensive waiting lists for new patients. The United States also supports UNODC’s global child-addiction program to develop protocols for treating opioid-addicted children, training treatment staff, and delivering services through nongovernmental organizations.859 Since 2015, INL has transitioned responsibility for 28 of the 86 U.S.- funded drug treatment centers to the MOPH. Transition of treatment centers scheduled for January 2017 has been suspended while INL, the MOPH, the Ministry of Counter Narcotics (MCN), and the NGOs renegotiate

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the transition plan.860 The remaining treatment centers will transition by the end of 2019. INL reduced funding to all facilities (including the MOPH port- folio of 28 centers) by approximately 20% in 2015, another 15% in 2016 and another 25% in 2017.861 Counter-Narcotics Community Engagement INL has obligated $12.7 million and expended $9.8 million to fund its Counter-Narcotics Community Engagement (CNCE) program since October 2013.862 CNCE funds communication and outreach programs aimed at discouraging poppy cultivation, preventing drug use, and encouraging licit crops. The United States also supports an anti-drug curriculum in Afghan schools, which has trained over 300 teachers and reached over 30,000 students. According to INL, surveys indicate that the public messaging campaigns are having a slow but steady impact on Afghan attitudes about illicit narcotics.863 CNCE is in its third phase, which began May 2016 and ends November 2017.864 CNCE pays an Afghan company, Sayara Strategies (Sayara), to identify provincial drivers of drug trafficking and poppy cultivation—as well as the public response and farmer sentiments towards poppy eradication and counter narcotics efforts—to better target its messaging campaign to reach key geographical and demographic groups.865 Sayara also places reporters in 12 key poppy-cultivating provinces. These reporters informally gather information and gauge perceptions on the state of counternarcotics policies and messaging. The reporters collect data by speaking with community members at mosques, bazaars, taxi stands, teahouses, shuras (gatherings of elders), and other places where relevant information is abundant and shared openly. Data is then communicated back to specialists and data analysts for further assessment.866

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OTHER AGENCY 4OVERSIGHT

201 OTHER AGENCY OVERSIGHT

CONTENTSOTHER AGENCY OVERSIGHT CONTENTS

Completed Oversight Activities 204 Ongoing Oversight Activities 208

Photo on previous page Helicopters of the U.S. Army’s 3rd Aviation Regiment launch a mission from Multinational Base Tarin Kowt, Afghanistan. (3rd Combat Aviation Brigade photo by Sgt. Scott Tant)

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OTHER AGENCY OVERSIGHT

SIGAR’s enabling legislation requires it to keep the Secretary of State and the Secretary of Defense fully informed about problems relating to the administration of reconstruction programs, and to submit a report to Congress on SIGAR’s oversight work and on the status of the U.S. reconstruction effort no later than 30 days after the end of each fiscal quarter. Each quarter, SIGAR requests updates from other agencies on completed and ongoing oversight activities. This section compiles these updates. Publicly available copies of completed reports are posted on the agencies’ respective websites. The descriptions appear as submitted, with minor changes to maintain consistency with other sections of this report: acronyms and abbreviations in place of full names; standardized capitalization, punctuation, and pre- ferred spellings; and third-person instead of first-person construction. These agencies perform oversight activities in Afghanistan and provide results to SIGAR: • Department of Defense Office of Inspector General (DOD IG) • Department of State Office of Inspector General (State OIG) • Government Accountability Office (GAO) • U.S. Army Audit Agency (USAAA) • U.S. Agency for International Development Office of Inspector General (USAID OIG)

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COMPLETED OVERSIGHT ACTIVITIES Table 4.1 lists the five oversight reports related to reconstruction that participating agencies completed this quarter. The table also lists USAID OIG’s four financial audits issued during the quarter as one report.

TABLE 4.1

RECENTLY COMPLETED OVERSIGHT ACTIVITIES OF OTHER U.S. AGENCIES, AS OF MARCH 31, 2017 Agency Report Number Date Issued Project Title DOD IG DODIG-2017-067 3/16/2017 Navy Inaccurately Reported Costs for Operation Freedom's Sentinel in the Cost of War Reports Combined Security Transition Command-Afghanistan Improved Controls Over U.S.‑Funded Ministry of DOD IG DODIG-2017-041 1/11/2017 Defense Fuel Contracts, but Further Improvements are Needed Management Assistance Report: Improvements Needed to the Security Certification Process to Ensure State OIG AUD-MERO-17-28 3/3/2017 Compliance with Security Standards at Embassy Kabul, Afghanistan Overseas Contingency Operations: OMB and DOD Should Revise the Criteria for Determining Eligible GAO IG GAO-17-68 1/28/2017 Costs and Identify the Costs Likely to Endure Long Term Overseas Contingency Operations: Observations on the Use of Force Management Levels in Afghanistan, GAO IG GAO-17-246T 12/1/2016 Iraq, and Syria

Source: DOD IG, response to SIGAR data call, 3/23/2017; State OIG, response to SIGAR data call, 3/24/2017; GAO, response to SIGAR data call, 3/1/2017; USAID OIG, response to SIGAR data call, 3/23/2017; USAAA, response to SIGAR data call, 3/14/2017.

U.S. Department of Defense Office of Inspector General During this quarter, DOD IG released two reports related to Afghanistan reconstruction.

Navy Inaccurately Reported Costs for Operation Freedom’s Sentinel in the Cost of War Report’s Audit of Reliability of Navy Financial Data Reported for Operation Freedom’s Sentinel DOD OIG determined the Navy could not support $866.3 million (91.3%) in obligations reported in the first quarter FY 2016 Cost of War reports for Operation Freedom’s Sentinel. Furthermore, the Navy did not accurately report $20.1 million in obligations and $85.4 million in disbursements in the first quarter FY 2016 Cost of War reports.

Combined Security Transition Command-Afghanistan Improved Controls Over U.S.-Funded Ministry of Defense Fuel Contracts, but Further Improvements are Needed CSTC-A and MOD initiated several measures to improve the oversight of the U.S. direct assistance–funded MOD fuel contracts. However, CSTC-A and MOD need to implement additional controls to improve the verification of fuel data. Specifically, CSTC-A and MOD cannot ensure the accuracy of fuel delivery reports and fuel consumption reports provided by vendors and ANA corps, respectively. This occurred because CSTC-A did not require the MOD to conduct physical inspections of fuel points or assess the ANA’s process for reporting consumption data. As a result, U.S. direct assistance continues to be vulnerable to fraud, waste, and abuse.

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U.S. Department of State Office of Inspector General-Middle East Regional Operations During this quarter, State OIG released one report related to Afghanistan reconstruction.

Management Assistance Report Improvements Needed to the Security Certification Process to Ensure Compliance with Security Standards at Embassy Kabul, Afghanistan State OIG issued a Management Assistance Report intended to prompt action to replace the altered components of the two security doors at Embassy Kabul and to bring attention to weaknesses in the security inspection process that allowed the improper alterations to go unaddressed for more than a year. Government Accountability Office During this quarter, GAO released two reports related to Afghanistan reconstruction.

Overseas Contingency Operations: OMB and DOD Should Revise the Criteria for Determining Eligible Costs and Identify the Costs Likely to Endure Long Term In 2010 the Office of Management and Budget (OMB), in collaboration with the Department of Defense (DOD), issued criteria for deciding whether items properly belong in the base budget or in the Overseas Contingency Operations (OCO) funding request. But the criteria are outdated and do not address the full scope of activities included in DOD’s fiscal year 2017 OCO budget request. For example, they do not address geographic areas such as Syria and Libya, where DOD has begun military operations; DOD’s deterrence and counterterrorism initiatives; or requests for OCO funding to support requirements not related to ongoing contingency operations. Further, the amount of OCO appropriations DOD considers as non-war increased from about 4 percent in fiscal year 2010 to 12 percent in fiscal year 2015. DOD officials agree that updated guidance is needed but note that the OMB has deferred the decision to update the criteria until a new administration is in place in 2017. Without reevaluating and revising the criteria, decision makers may be hindered in their ability to set priorities and make funding trade-offs. DOD officials told GAO that the department had developed an initial estimate of costs being funded with OCO appropriations that are likely to endure beyond current operations, but has not finalized or reported its estimate outside of the department. In May and July 2016, OMB and DOD officials said the estimate of enduring costs was between $20 billion and $30 billion—as much as 46 percent of DOD’s total OCO budget request for fiscal year 2017—and indicated that DOD continues to evaluate and

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revise this estimate, which might be closer to the higher end of that range. GAO recommended in 2014 that DOD develop guidance for transitioning enduring costs funded by OCO appropriations to DOD’s base budget. According to DOD officials, DOD has not finalized and reported its estimate of enduring costs because current statutory spending caps limit its ability to increase base budget funding. Without a reliable estimate of DOD’s enduring OCO costs, decision makers will not have a complete picture of the department’s future funding needs or be able to make informed choices and trade-offs in budget formulation and decision making. GAO recommends that DOD, in collaboration with OMB, reevaluate and revise the criteria for determining what can be included in DOD’s OCO budget requests; and that DOD develop a complete and reliable estimate of enduring OCO costs to report in future budget requests. DOD concurred with the first recommendation and plans to propose revised OCO criteria to OMB. DOD partially concurred with the second recommendation but identified no steps planned to develop and report its enduring OCO costs.

Overseas Contingency Operations: Observations on the Use of Force Management Levels in Afghanistan, Iraq, and Syria Military officials planning for and executing operations under force management levels have taken various actions to maximize military capabilities deployed to countries under those limits, as discussed below. The Department of Defense (DOD) has increased its engagement with partner nations through advise-and-assist missions that rely on partner nation security forces to conduct operations. While this action helps leverage U.S. resources, it can create complications for U.S. planners in terms of allocating capabilities and resources. In 2011, GAO reported that the Army and Marine Corps have faced challenges in providing the necessary field-grade officers and specialized capabilities for advisor teams, as well as challenges regarding the effect on the readiness and training of brigades whose combat teams have been split up to source advisor teams. GAO made three recommendations related to advisor teams. DOD concurred and implemented two recommendations relating to improving the ability of advisor teams to prepare for and execute their mission. DOD has relied on U.S. and coalition airpower to provide support to partner-nation ground forces in lieu of U.S. ground combat capabilities. For example, since U.S. operations related to the Islamic State of Iraq and Syria (ISIS) began in August 2014, Coalition members have dropped more than 57,000 munitions. Air-based intelligence, surveillance, and reconnaissance systems have also proved critical to commanders by providing them timely and accurate information. While effective, this reliance on air power is not without its costs or challenges. For example, the Secretary of Defense stated in February 2016 that the intensity of the U.S. air campaign against ISIS has been depleting U.S. stocks of certain weapons.

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DOD has increased its use of U.S. Special Operations Forces to increase its operational reach and maximize its capabilities under force management levels. However, the increased use of U.S. Special Operations Forces in operations has resulted in a high pace of deployments which can affect readiness, retention, and morale. GAO made 10 recommendations to DOD related to U.S. Special Operations Forces. DOD concurred or partially concurred and has implemented 7 recommendations relating to security force assistance activities and readiness of U.S. Special Operations Forces. DOD relies on contractors to support a wide range of military operations and free up uniformed personnel to directly support mission needs. During operations in Afghanistan and Iraq contractor personnel played a critical role in supporting U.S. troops and sometimes exceeded the number of deployed military personnel. However, the increased use of contractors and temporary personnel to provide support during operations has its challenges, including oversight of contractors in deployed environments. GAO made four recommendations to improve oversight of operational contract support. DOD concurred with all four, and has implemented three of them. GAO also made a recommendation that DOD develop guidance relating to costs of overseas operations, with which DOD partially concurred and which remains open. GAO made 18 recommendations in prior work cited in this statement. DOD has implemented 12 of them. Continued attention is needed to ensure that some recommendations are addressed, such as improving visibility in total Special Operations funding to determine whether opportunities exist to balance deployments across the joint force. U.S. Army Audit Agency The USAAA completed no audits related to Afghanistan reconstruction this quarter. U.S. Agency for International Development Office of Inspector General This quarter, USAID OIG issued four financial audit reports of USAID/ Afghanistan programs. These audits identified $288,173 in questioned costs, seven significant deficiencies in internal controls, and four instances of material noncompliance.

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ONGOING OVERSIGHT ACTIVITIES As of March 31, 2017, the participating agencies reported 20 ongoing oversight activities related to reconstruction in Afghanistan. The activities reported are listed in Table 4.2 and described in the following sections by agency.

TABLE 4.2

ONGOING OVERSIGHT ACTIVITIES OF OTHER U.S. AGENCIES, AS OF MARCH 31, 2017 Agency Project Number Date Initiated Project Title DODIG D2017-D00SPO-0081.000 2/2/2017 Evaluation of U.S./Coalition Efforts to Train, Advise, and Assist the Afghan Air Force Audit of Combined Security Transition Command - Afghanistan Oversight and Management of DOD IG D2017-D000JB-0063.000 1/11/2017 Ammunition Supporting Operation Freedom's Sentinel DOD IG D2016-DISPA2-0195.000 8/11/2016 Evaluation of Airborne ISR Allocation Process Supporting Counterterrorism Operations in Afghanistan DOD IG D2016-D000CG-0163.000 6/8/2016 Audit of DOD Support for Counternarcotics Requirements Assessment of U.S./Coalition Efforts to Enable the Afghan Ministry of Defense to Develop its Oversight DOD IG D2016-D00SPO-0153.000 5/17/2016 and Internal Control Capability DOD IG D2016-D00SPO-0083.000 2/19/2016 Allegations of Child Sexual Abuse by Members of the Afghan National Defense and Security Forces State OIG 17AUD018 1/1/2017 Follow-Up Review of Explosive Detection Dogs in Iraq and Afghanistan State OIG 17AUD14 10/1/2016 Audit of Department of State Grants and Cooperativ Agreements Awarded to Kennesaw State University State OIG 17AUD031 9/1/2016 Audit of Afghanistan Life Support Services (ALiSS) Contract Planning & Solicitation and Award Process State OIG 16AUD077 8/1/2016 Audit of the Department of State’s Invoice Review Process for Iraq and Afghanistan Audit of the Antiterrorism Assistance Program in Countries Under the Department of State Bureaus of State OIG 16AUD072 7/1/2016 Near Eastern Affairs (NEA) and South and Central Asian Affairs (SCA) Audit of Counter Narcotics and Police Reform Program Compliance Follow-up in Pakistan and State OIG 16AUD074 6/1/2016 Afghanistan State OIG 16AUD044 10/1/2015 Audit of Embassy Kabul Construction and Commissioning GAO 101668 2/10/2017 U.S.-Procured Equipment in Afghanistan GAO 101213 10/31/2016 Iraqi and Afghan Special Immigrant Resettlement GAO 101053 8/1/2016 Afghan Defense and Security Forces' Equipment and Capability GAO 100993 7/14/2016 OIG Oversight of US Government's Efforts in Afghanistan GAO 100914 6/6/2016 DOD Deployed Biometrics and Forensics USAID OIG FF1C0216 5/11/2016 Audit of USAID/Afghanistan’s New Development Partnership USAID OIG FF1C0116 1/19/2016 Audit of USAID/Afghanistan’s Use of the Afghanistan Reconstruction Trust Fund

U.S. Department of Defense Office of Inspector General The Department of Defense continues to face many challenges in executing its Overseas Contingency Operations (OCO). The Department of Defense Office of Inspector General (DOD IG) has identified priorities based on those challenges and high risks. DOD IG oversight focuses on the areas of monitoring and oversight of acquisition and contracting processes that support training, equipping, and sustaining Afghanistan security forces. DOD IG will also continue to review and assess the Department’s efforts to train and equip Afghan National Defense and Security Forces.

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The DOD IG-led Southwest Asia Joint Planning Group assists in the coordination and deconfliction of federal and DOD OCO-related oversight activities. DOD IG, working with SIGAR as well as fellow Inspectors General and Defense oversight community members, has issued the FY 2017 Comprehensive Oversight Plan for Overseas Contingency Operations (COP-OCO), the second annual joint strategic plan submitted to Congress describing whole-of-government oversight activities in support of the ongoing overseas contingency operations as well as oversight efforts in Southwest Asia. The COP-OCO includes the Joint Strategic Oversight Plans (JSOP) for Operation Inherent Resolve and Afghanistan. The Afghanistan JSOP includes Operation Freedom’s Sentinel (OFS), as well as reconstruction and humanitarian assistance programs and activities that are separate from OFS. DOD IG has six ongoing projects this quarter that relate to reconstruction or security operations in Afghanistan.

Evaluation of U.S./Coalition Efforts to Train, Advise, and Assist the Afghan Air Force (D2017-D00SPO-0081.000, Initiated February 2, 2017) DOD IG is evaluating the U.S./Coalition progress toward—and its planned efforts to accomplish—the Train, Advise, and Assist Command-Air (TAAC- Air) mission of training, advising, and assisting their Afghan partners to develop into a professional, capable, and sustainable air force.

Audit of Combined Security Transition Command— Afghanistan Oversight and Management of Ammunition Supporting Operation Freedom’s Sentinel (D2017-D000JB-0063.000, Initiated January 11, 2017) DOD IG is determining whether the Combined Security Transition Command-Afghanistan provided effective oversight of ammunition for the Afghanistan National Defense and Security Forces. This is part of a series of audits related to U.S.-direct assistance to the Government of the Islamic Republic of Afghanistan.

Evaluation of Airborne ISR Allocation Process Supporting Counterterrorism Operations in Afghanistan (D2016-DISPA2-0195.000, Initiated August 11, 2016) DOD IG is determining whether US Forces-Afghanistan’s airborne Intelligence, Surveillance, and Reconnaissance (ISR) allocation process effectively supports U.S. counterterrorism operations.

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Audit of DOD Support for Counternarcotics Requirements (D2016-D000CG-0163.000, Initiated June 8, 2016) In response to congressional requests, the DOD IG is determining whether DOD effectively supported counternarcotics requirements agreed upon between the Department of Justice and DOD. In addition, the DOD OIG is determining how DOD used funding to support those requirements.

Assessment of U.S./Coalition Efforts to Enable the Afghan Ministry of Defense to Develop its Oversight and Internal Control Capability (D2016-D00SP0-0153.000, Initiated May 17, 2016) DOD IG is determining whether U.S. Government and Coalition Train- Advise-Assist efforts will enable the Afghan Ministry of Defense (MOD) and subordinate organizations to develop a Transparency, Accountability and Oversight capability that helps the MOD to run efficient and effective operations, report reliable information about its operations, and comply with applicable laws and regulations.

Allegations of Child Sexual Abuse by Members of the Afghan National Defense and Security Forces (D2016-D00SP0-0083.000, Initiated February 19, 2016) DOD IG is focusing on answering a number of specific questions, including DOD implementation of Title 10 “Leahy Law” statutory language regarding human-rights violations, raised by several members of Congress and congressional staff. U.S. Department of State Office of Inspector General-Middle East Regional Operations State OIG has seven ongoing projects this quarter related to Afghanistan reconstruction.

Follow-Up Review of Explosive Detection Dogs in Iraq and Afghanistan (Project No. 17AUD018, Initiated January 1, 2017) In a 2010 report, OIG found that the Bureaus of Diplomatic Security (DS) could not verify the detection abilities of its explosive-detection canines under three programs: the Baghdad Embassy Security Force, the Kabul Embassy Security Force, and Personal Protective Services in Kabul. OIG made recommendations for DS to improve those programs by, among other things, independently verifying the canines’ detection abilities, and developing and issuing procedures on importing and storing testing materials. This audit will follow up on the recommendations made in the 2010 report.

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Audit of Department of State Grants and Cooperative Agreements Awarded to Kennesaw State University (Project No. 17AUD014, Initiated October 1, 2016) The purposes of this audit are: (1) to determine whether Kennesaw State University appropriately expended funds and accurately reported financial performance of grant programs in Afghanistan and (2) to determine whether Kennesaw State University met program goals and accurately reported programmatic performance.

Audit of Afghanistan Life Support Services (ALSS) Contract Planning & Solicitation and Award Process (Project No. 17AUD031, Initiated September 1, 2016) The audit seeks to determine whether the Department is planning and implementing the solicitation and award process for the ALSS contract in accordance with acquisition regulations and Department guidance.

Audit of the Department of State’s Invoice Review Process for Iraq and Afghanistan (Project No. 17AUD077, Initiated August 1, 2016) To determine if the Contracting Officer Representatives were adequately overseeing invoices for Overseas Contingency Operations’ contracts.

Audit of the Antiterrorism Assistance Program in Countries Under the Department of State Bureaus of Near Eastern Affairs and South and Central Asian Affairs (Project No. 16AUD072, Initiated July 1, 2016) The audit aims to determine the extent to which the Bureaus of Diplomatic Security (DS) and Counterterrorism (CT) have: (1) developed specific, mea- sureable, and outcome-oriented goals and objectives; (2) developed and implemented an evaluation process to assess host-country performance; and (3) established letters of agreement with host countries for sustaining the Antiterrorism Assistance programs. The audit will also assess DS and CT’s contract monitoring and oversight, and invoice review processes.

Audit of Counter Narcotics and Police Reform Program Compliance Follow-up in Pakistan and Afghanistan (Project No. 16AUD074, Initiated June 1, 2016) The audit will attempt to determine whether the Bureau of International Narcotics and Law Enforcement Affairs has: (1) complied with prior OIG recommendations to (a) implement performance measurement plans for its programs in Pakistan and Afghanistan, (b) monitor progress towards its program goals, and (c) fund its programs appropriately; and (2) applied the recommendations to its programs in other countries.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 211 OTHER AGENCY OVERSIGHT

Audit of Embassy Kabul Construction and Commissioning (Project No. 16AUD044, Initiated October 1, 2015) This audit seeks to determine whether the Bureau of Overseas Building Operations followed Department policies and guidance governing the affirmation of substantial completion and final acceptance of construction projects at U.S. Embassy Kabul. Government Accountability Office GAO has five ongoing projects this quarter related to Afghanistan reconstruction.

U.S.-Procured Equipment in Afghanistan (Project No. 101668, Initiated February 10, 2017) This review addresses what equipment the U.S. has purchased for the Afghan National Defense and Security Forces (ANDSF). Since 2002, the United States, with assistance from the North Atlantic Treaty Organization and other coalition nations, has worked to train, equip, and develop the capability of the ANDSF. In January 2015, the ANDSF formally assumed security responsibilities for all of Afghanistan. The United States continues to train and equip the ANDSF to develop a force that can protect the Afghan people and contribute to regional and international security. A House report associated with the Fiscal Year 2017 National Defense Authorization Act cited concerns about the security situation in Afghanistan and included a provision for GAO to review U.S. assistance to the ANDSF, including weapons and equipment.

Iraqi and Afghan Special Immigrant Resettlement (Project No. 101213, Initiated October 31, 2016) Iraqi and Afghan special immigrant visa (SIV) holders who either worked as translators or were employed by the U.S. government in Iraq or Afghanistan are eligible for resettlement assistance when they are admitted in the United States. The Department of State’s Refugee Admissions Reception and Placement Program provides initial resettlement services to refugees and certain SIVs, working with nine national resettlement agencies and their local affiliates. After the first 90 days from refugees’ and SIVs’ entry into the country, the Department of Health and Human Services’ Office of Refugee Resettlement provides resettlement services through state-level or private programs. The review will address: (1) How do relevant federal agencies ensure that the housing, employment, and other needs of Iraqi and Afghan SIV holders are being met? (2) What do available housing and employment information show regarding Iraqi and Afghan SIV holders’ progress in achieving self-sufficiency? And (3) What factors, if any, affect resettlement agencies’ ability to serve Iraqi and Afghan SIV holders?

212 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION OTHER AGENCY OVERSIGHT

Afghan Defense and Security Forces’ Equipment and Capability (Project No. 101053, Initiated August 1, 2016) H. Rpt. 114-537 (passed the House 5/18/16) to accompany H.R. 4909 National Defense Authorization Act of FY 2017 (Division A-Department of Defense Authorizations-Title XII-Matters Related to Foreign Nations- Assistance to the Afghan National Defense and Security Forces.) Directs GAO to review major weapon systems and equipment provided to the Afghan National Defense and Security Forces (ANDSF) in light of the deteriorating security situation. The mandate calls for GAO to: (1) outline all major weapon systems and equipment procured for the ANDSF, consistent with the program of record; (2) summarize how such weapon systems and equipment support the overall strategy for the ANDSF; (3) describe the current capability and capacity of the ANDSF to operate and sustain such weapon systems and equipment; and (4) identify gaps in ANDSF capability given the evolving security situation and overall strategy.

OIG Oversight of US Government’s Efforts in Afghanistan (Project No. 100993, Initiated July 14, 2016) GAO is to review the authorities and activities of the OIGs at the Department of State, DOD, USAID, and the Special Inspector General for Afghanistan Reconstruction regarding oversight of the expenditures of U.S. funds in Afghanistan since January 1, 2015. The engagement team will review enabling legislation and directive guidance that outlines the oversight mandate of each IG and identify any overlap or gaps in the oversight among the mandates of each IG. We will also describe the oversight activities and primary areas of focus of each IG and review other matters the engagement team deems relevant.

DOD Deployed Biometrics and Forensics (Project No. 100914, Initiated June 6, 2016) DOD relies on expeditionary biometric and forensic capabilities to identify, target, and disrupt terrorists and enemy combatants globally. For example, in support of operations in Iraq and Afghanistan, DOD trained service members to collect biometric data on persons of interest to identify enemy combatants, and deployed forensic laboratories to analyze evidence collected from the battlefield to aid in the capture and prosecution of enemy combatants. DOD initially established and funded its deployable biometric and forensic capabilities using Overseas Contingency Operations funding, and is now transitioning these capabilities to its base budget to support enduring mission requirements. This report investigates the extent that DOD has: (1) developed a process for determining and validating its future deployable biometrics and forensics requirements; (2) taken actions to ensure that its deployable biometrics and forensics capabilities—including materiel solutions, trained personnel,

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 213 OTHER AGENCY OVERSIGHT

and funding—are available to meet validated requirements; and (3) taken actions to address prior GAO recommendations regarding its biometrics and forensics capabilities since 2011. U.S. Army Audit Agency This quarter the USAAA has no ongoing audits related to Afghanistan reconstruction. U.S. Agency for International Development Office of Inspector General This quarter USAID OIG has two ongoing audits related to reconstruction initiatives.

Audit of USAID/Afghanistan’s New Development Partnership (Project No. FF1C0216, Initiated May 11, 2016) The objectives of this audit are to determine if USAID/Afghanistan has adopted internal policies and procedures to adequately verify the achievement of New Development Partnership (NDP) indicators contained in the July 25, 2015, NDP results framework; and if USAID/Afghanistan has adequately verified the achievement of completed indicators under the NDP for any payments made to date.

Audit of USAID/Afghanistan’s Use of the Afghanistan Reconstruction Trust Fund (Project No. FF1C0116, Initiated January 19, 2016) The objectives of this audit are to determine if USAID/Afghanistan has adopted effective and consistent practices to provide reasonable assurance that activities implemented through the Afghanistan Reconstruction Trust Fund contribute to achieving USAID’s objectives in Afghanistan.

214 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION OTHER AGENCY OVERSIGHT

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 215 APPENDICES AND ENDNOTES CONTENTS

Appendix A 218 Appendix B 222 Appendix C 224 Appendix D 228 Appendix E 236 Endnotes 244

The Official Seal of SIGAR The official seal of SIGAR represents the coordination of efforts between the United States and Afghanistan to provide accountability and oversight of reconstruction activities. The phrases in Dari (top) and Pashto (bottom) on the seal are translations of SIGAR’s name. APPENDICES AND ENDNOTES

217 APPENDICES

APPENDIX A CROSS-REFERENCE OF REPORT TO STATUTORY REQUIREMENTS

This appendix cross-references the pages of this report to the quarterly reporting and related requirements under SIGAR’s enabling legislation, the National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110- 181, § 1229 (Table A.1).

TABLE A.1

CROSS-REFERENCE TO SIGAR QUARTERLY REPORTING REQUIREMENTS UNDER PUB. L. NO. 110-181, § 1229 Public Law Section SIGAR Enabling Language SIGAR Action Report Section Purpose Section 1229(a)(3) To provide for an independent and objective means of keeping the Ongoing; quarterly report Full report Secretary of State and the Secretary of Defense fully and currently informed about problems and deficiencies relating to the administration of such programs and operations and the necessity for and progress on corrective action. Supervision Section 1229(e)(1) The Inspector General shall report directly Report to the Secretary of State Full report to, and be under the general supervision and the Secretary of Defense of, the Secretary of State and the Secretary of Defense. Duties Section 1229(f)(1) OVERSIGHT OF AFGHANISTAN RECONSTRUCTION — Review appropriated/ Full report It shall be the duty of the Inspector General to conduct, supervise, available funds and coordinate audits and investigations of the treatment, handling, and expenditure of amounts appropriated or otherwise made avail- Review programs, operations, able for the reconstruction of Afghanistan, and of the programs, contracts using appropriated/ operations, and contracts carried out utilizing such funds, including available funds subsections (A) through (G) below. Section 1229(f)(1)(A) The oversight and accounting of the obligation and expenditure of Review obligations and SIGAR Oversight such funds expenditures of appropriated/ Funding available funds Section 1229(f)(1)(B) The monitoring and review of reconstruction activities funded by Review reconstruction activities SIGAR Oversight such funds funded by appropriations and donations Section 1229(f)(1)(C) The monitoring and review of contracts funded by such funds Review contracts using appro- Note 1 priated and available funds Section 1229(f)(1)(D) The monitoring and review of the transfer of such funds and associ- Review internal and external Appendix B ated information between and among departments, agencies, and transfers of appropriated/avail- entities of the United States, and private and nongovernmental able funds entities. Section 1229(f)(1)(E) The maintenance of records on the use of such funds to facilitate Maintain audit records SIGAR Oversight future audits and investigations of the use of such fund[s] Appendix C Appendix D Section 1229(f)(1)(F) The monitoring and review of the effectiveness of United States Monitoring and review Audits coordination with the Governments of Afghanistan and other donor as described countries in the implementation of the Afghanistan Compact and the Afghanistan National Development Strategy Continued on the next page

218 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION APPENDICES

TABLE A.1 (CONTINUED)

CROSS-REFERENCE TO SIGAR QUARTERLY REPORTING REQUIREMENTS UNDER PUB. L. NO. 110-181, § 1229 Public Law Section SIGAR Enabling Language SIGAR Action Report Section Section 1229(f)(1)(G) The investigation of overpayments such as duplicate payments Conduct and reporting of inves- Investigations or duplicate billing and any potential unethical or illegal actions tigations as described of Federal employees, contractors, or affiliated entities, and the referral of such reports, as necessary, to the Department of Justice to ensure further investigations, prosecutions, recovery of further funds, or other remedies Section 1229(f)(2) OTHER DUTIES RELATED TO OVERSIGHT — Establish, maintain, and Full report The Inspector General shall establish, maintain, and oversee such oversee systems, procedures, systems, procedures, and controls as the Inspector General consid- and controls ers appropriate to discharge the duties under paragraph (1). Section 1229(f)(3) DUTIES AND RESPONSIBILITIES UNDER INSPECTOR GENERAL ACT Duties as specified in Inspector Full report OF 1978 — General Act In addition, … the Inspector General shall also have the duties and responsibilities of inspectors general under the Inspector General Act of 1978. Section 1229(f)(4) COORDINATION OF EFFORTS — Coordination with the Other Agency The Inspector General shall coordinate with, and receive the inspectors general of Oversight cooperation of, each of the following: (A) the Inspector General DOD, DOS, and USAID of the Department of Defense, (B) the Inspector General of the Department of State, and (C) the Inspector General of the United States Agency for International Development. Federal Support and Other Resources Section 1229(h)(5)(A) ASSISTANCE FROM FEDERAL AGENCIES — Expect support as Full report Upon request of the Inspector General for information or assis- requested tance from any department, agency, or other entity of the Federal Government, the head of such entity shall, insofar as is practi- cable and not in contravention of any existing law, furnish such information or assistance to the Inspector General, or an authorized designee. Section 1229(h)(5)(B) REPORTING OF REFUSED ASSISTANCE — None reported N/A Whenever information or assistance requested by the Inspector General is, in the judgment of the Inspector General, unreasonably refused or not provided, the Inspector General shall report the circumstances to the Secretary of State or the Secretary of Defense, as appropriate, and to the appropriate congressional committees without delay. Reports Section 1229(i)(1) QUARTERLY REPORTS — Report – 30 days after the Full report Not later than 30 days after the end of each fiscal-year quarter, end of each calendar quarter Appendix B the Inspector General shall submit to the appropriate committees of Congress a report summarizing, for the period of that Summarize activities of the quarter and, to the extent possible, the period from the end of Inspector General such quarter to the time of the submission of the report, the activities during such period of the Inspector General and the Detailed statement of all activities under programs and operations funded with amounts obligations, expenditures, and appropriated or otherwise made available for the reconstruction of revenues Afghanistan. Each report shall include, for the period covered by such report, a detailed statement of all obligations, expenditures, and revenues associated with reconstruction and rehabilitation activities in Afghanistan, including the following – Continued on the next page

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 219 APPENDICES

TABLE A.1 (CONTINUED)

CROSS-REFERENCE TO SIGAR QUARTERLY REPORTING REQUIREMENTS UNDER PUB. L. NO. 110-181, § 1229 Public Law Section SIGAR Enabling Language SIGAR Action Report Section Section 1229(i)(1)(A) Obligations and expenditures of appropriated/donated funds Obligations and expenditures Appendix B of appropriated/donated funds Section 1229(i)(1)(B) A project-by-project and program-by-program accounting of the Project-by-project and Funding costs incurred to date for the reconstruction of Afghanistan, program-by-program account- Note 1 together with the estimate of the Department of Defense, ing of costs. List unexpended the Department of State, and the United States Agency for funds for each project or International Development, as applicable, of the costs to com- program plete each project and each program Section 1229(i)(1)(C) Revenues attributable to or consisting of funds provided by Revenues, obligations, and Funding foreign nations or international organizations to programs and expenditures of donor funds projects funded by any department or agency of the United States Government, and any obligations or expenditures of such revenues Section 1229(i)(1)(D) Revenues attributable to or consisting of foreign assets seized or Revenues, obligations, and Funding frozen that contribute to programs and projects funded by any expenditures of funds from U.S. government department or agency, and any obligations or seized or frozen assets expenditures of such revenues Section 1229(i)(1)(E) Operating expenses of agencies or entities receiving amounts Operating expenses of Funding appropriated or otherwise made available for the reconstruction agencies or any organization Appendix B of Afghanistan receiving appropriated funds Section 1229(i)(1)(F) In the case of any contract, grant, agreement, or other funding Describe contract details Note 1 mechanism described in paragraph (2)*— (i) The amount of the contract or other funding mechanism; (ii) A brief discussion of the scope of the contract or other funding mechanism; (iii) A discussion of how the department or agency of the United States Government involved in the contract, grant, agreement, or other funding mechanism identified and solicited offers from potential contractors to perform the contract, grant, agreement, or other funding mechanism, together with a list of the potential individuals or entities that were issued solicitations for the offers; and (iv) The justification and approval documents on which was based the determination to use procedures other than procedures that provide for full and open competition Section 1229(i)(3) PUBLIC AVAILABILITY — Publish report as directed at Full report The Inspector General shall publish on a publicly available www.sigar.mil Internet website each report under paragraph (1) of this subsec- Dari and Pashto translation tion in English and other languages that the Inspector General in process determines are widely used and understood in Afghanistan. Section 1229(i)(4) FORM — Publish report as directed Full report Each report required under this subsection shall be submitted in unclassified form, but may include a classified annex if the Inspector General considers it necessary. Continued on the next page

220 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION APPENDICES

TABLE A.1 (CONTINUED)

CROSS-REFERENCE TO SIGAR QUARTERLY REPORTING REQUIREMENTS UNDER PUB. L. NO. 110-181, § 1229 Public Law Section SIGAR Enabling Language SIGAR Action Report Section Section 1229(j)(1) Inspector General shall also submit each report required under Submit quarterly report Full report subsection (i) to the Secretary of State and the Secretary of Defense.

Note 1: Although this data is normally made available on SIGAR’s website (www.sigar.mil), the data SIGAR has received is in relatively raw form and is currently being reviewed, analyzed, and organized for future SIGAR use and publication.

* Covered “contracts, grants, agreements, and funding mechanisms” are defined in paragraph (2) of Section 1229(i) of Pub. L. No. 110-181 as being—

“any major contract, grant, agreement, or other funding mechanism that is entered into by any department or agency of the United States Government that involves the use of amounts appropriated or otherwise made available for the reconstruction of Afghanistan with any public or private sector entity for any of the following purposes:

To build or rebuild physical infrastructure of Afghanistan.

To establish or reestablish a political or societal institution of Afghanistan.

To provide products or services to the people of Afghanistan.”

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 221 APPENDICES

APPENDIX B

U.S. FUNDS FOR AFGHANISTAN RECONSTRUCTION ($ MILLIONS) Table B.1 lists funds appropriated for Afghanistan reconstruction by program, per year, as of March 31, 2017. Table B.2 lists fund appropriated for counter narcotics initiatives since 2002.

TABLE B.2 TABLE B.1

COUNTERNARCOTICS, CUMULATIVE U.S. FUNDING SOURCES AGENCY Total FY 2002–05 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017a AMOUNT APPROPRIATED, Security SINCE 2002 ($ MILLIONS) Afghanistan Security Forces Fund (ASFF) DOD 66,021.96 995.00 1,908.13 7,406.40 2,750.00 5,606.94 9,166.77 10,619.28 9,200.00 4,946.20 3,962.34 3,939.33 3,652.26 1,869.31 ASFF $1,311.92 Train & Equip (DOD) DOD 440.00 440.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 DOD CN 3,016.11 Foreign Military Financing (FMF) State 1,059.14 1,059.14 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ESF 1,555.44 International Military Education and Training (IMET) State 17.07 2.18 0.98 1.19 1.66 1.40 1.76 1.56 1.18 1.42 1.50 1.05 1.20 0.00 INCLE 2,178.47 Voluntary Peacekeeping (PKO) State 69.33 69.33 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Afghanistan Freedom Support Act (AFSA) DOD 550.00 550.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 DEAa 443.43 Drug Interdiction & Counter-Drug Activities (DOD CN) DOD 3,016.11 296.34 108.05 290.97 192.81 230.06 392.27 379.83 472.99 255.81 238.96 0.00 138.76 19.26 Total $8,505.36 Total - Security 71,173.61 3,411.98 2,017.17 7,698.57 2,944.47 5,838.40 9,560.80 11,000.67 9,674.16 5,203.44 4,202.80 3,940.38 3,792.22 1,888.57

Table B.2 Note: Numbers have been rounded. Governance & Development Counternarcotics funds cross-cut both the Security and Governance & Development spending categories; these Commander's Emergency Response Program (CERP) DOD 3,684.96 176.00 215.00 209.00 488.33 550.67 1,000.00 400.00 400.00 200.00 30.00 10.00 5.00 0.96 funds are also captured in those categories in Table B.1. Afghanistan Infrastructure Fund (AIF) DOD 988.50 0.00 0.00 0.00 0.00 0.00 0.00 299.00 400.00 145.50 144.00 0.00 0.00 0.00 Figures represent cumulative amounts appropriated for counternarcotics initiatives in Afghanistan since 2002. Task Force for Business and Stability Operations (TFBSO) DOD 822.85 0.00 0.00 0.00 0.00 14.44 59.26 239.24 245.76 138.20 122.24 3.72 0.00 0.00 Intitatives include eradication, interdiction, support to Economic Support Fund (ESF) USAID 19,411.27 2,531.05 473.39 1,224.75 1,399.51 2,077.48 3,346.00 2,168.51 1,836.76 1,802.65 907.00 831.90 812.27 0.00 Afghanistan’s Special Mission Wing (SMW), counternarcotics- related capacity building, and alternative agricultural Development Assistance (DA) USAID 886.50 383.18 185.08 166.81 149.43 0.40 0.30 0.00 0.00 0.35 0.00 0.95 0.00 0.00 development efforts. ESF and INCLE figures show the Child Survival & Health (CSH + GHAI) USAID 554.63 128.60 41.45 100.77 63.04 58.23 92.30 69.91 0.00 0.25 0.01 0.06 0.00 0.00 cumulative amounts appropriated for counternarcotics intiatives from those funds. SIGAR excluded ASFF funding Commodity Credit Corp (CCC) USAID 31.48 8.80 0.00 0.00 10.77 4.22 4.22 3.09 0.38 0.00 0.00 0.00 0.00 0.00 for the SMW after FY 2013 from this analysis due to the decreasing number of counterternarcotics missions USAID (other) USAID 52.08 5.50 0.00 0.00 21.96 2.81 4.90 6.25 7.10 1.84 0.80 0.82 0.10 0.00 conducted by the SMW. Non-Proliferation, Antiterrorism, Demining & Related (NADR) State 730.94 186.25 35.72 36.72 29.72 59.92 70.74 69.30 65.32 52.60 43.20 43.50 37.96 0.00 a DEA receives funding from State’s Diplomatic & Consular Provincial Reconstruction Team Advisors USDA 5.70 0.00 0.00 0.00 0.00 5.70 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Programs account in addition to DEA’s direct line Treasury Technical Assistance Treasury 4.45 2.91 0.19 0.13 0.75 0.47 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 appropriation listed in Appendix B. International Narcotics Control & Law Enforcement (INCLE) State 4,875.86 989.28 232.65 251.74 307.56 493.90 589.00 400.00 357.92 593.81 225.00 250.00 185.00 0.00 Table B.2 Source: SIGAR analysis of counternarcotics Drug Enforcement Administration (DEA) DOJ 234.02 23.93 23.66 20.38 40.59 18.88 19.20 18.70 18.70 17.00 18.70 9.05 3.31 1.93 funding, 4/19/2017; State, response to SIGAR data call, 4/13/2017; DOD, response to SIGAR data calls, 4/11/2017 Total - Governance & Development 32,283.23 4,435.52 1,207.14 2,010.30 2,511.66 3,287.12 5,185.92 3,673.99 3,331.93 2,952.19 1,490.96 1,149.99 1,043.63 2.88 and 3/8/2016; USAID, response to SIGAR data call, 4/9/2017; DOJ, response to SIGAR data call, 4/14/2017. Humanitarian P.L. 480 Title I USDA 5.00 5.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Table B.1 Note: Numbers have been rounded. DOD reprogrammed $1 billion from FY 2011 ASFF, $1 billion from P.L. 480 Title II USAID 891.28 254.80 56.60 60.00 60.00 177.00 58.13 112.55 0.00 46.20 66.00 0.00 0.00 0.00 FY 2012 ASFF, and $178 million from FY 2013 ASFF to Disaster Assistance (IDA) USAID 633.76 298.23 0.04 0.03 16.84 27.13 29.61 66.23 56.00 21.50 28.19 25.71 39.89 24.38 fund other DOD OCO requirements. ASFF data reflects the following rescissions: $1 billion from FY 2012 in Pub. L. No. Transition Initiatives (TI) USAID 37.59 32.58 0.00 0.00 0.00 0.75 0.85 1.08 0.63 0.32 0.83 0.52 0.04 0.00 113-6, $764.38 million from FY 2014 in Pub. L. No. 113- Migration & Refugee Assistance (MRA) State 1144.17 313.00 41.80 54.00 44.25 76.79 80.93 65.00 99.56 76.07 107.89 129.27 55.61 0.00 235, and $400 million from FY 2015 in Pub. L. No. 114-113. DOD reprogrammed $230 million into FY 2015 ASFF. DOD Emergency Refugee & Migration Assistance (ERMA) State 25.20 25.00 0.00 0.00 0.00 0.20 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 transferred $101 million from FY 2011 AIF, $179.5 million from FY 2013 AIF, and $55 million from FY 2014 AIF to the Food for Progress USDA 109.49 44.14 23.24 9.47 20.55 12.09 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ESF to fund infrastructure projects implemented by USAID. 416(b) Food Aid USDA 95.18 95.18 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 a FY 2017 figures reflect amounts made available for Food for Education USDA 50.49 25.41 25.08 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 obligation under continuing resolutions. Emerson Trust USDA 22.40 0.00 0.00 0.00 22.40 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Table B.1 Source: DOD, response to SIGAR data calls, Total - Humanitarian 3,014.55 1,093.33 146.76 123.50 164.04 293.96 169.52 244.85 156.18 144.09 202.91 155.50 95.54 24.38 1/13/2017, 1/12/2017, 10/11/2016, 10/22/2012, Civilian Operations 10/14/2009, and 10/1/2009; State, response to SIGAR data calls, 1/18/2017, 1/6/2017, 10/18/2016, Oversight 458.35 0.00 0.00 2.50 14.30 25.20 34.40 37.20 59.00 58.70 62.65 68.60 62.37 33.43 5/4/2016, 10/20/2015, 4/15/2015, 4/15/2014, 6/27/2013, 10/5/2012 and 6/27/2012; Treasury, Other 10,329.95 539.63 131.90 207.80 435.51 1,065.86 1,761.70 905.10 1,425.47 1,272.52 852.52 909.50 795.45 27.00 response to SIGAR data call, 7/9/2015; OMB, response Total - Civilian Operations 10,788.31 539.63 131.90 210.30 449.81 1,091.06 1,796.10 942.30 1,484.47 1,331.22 915.17 978.10 857.81 60.44 to SIGAR data calls, 4/16/2015, 7/14/2014, 7/19/2013 and 1/4/2013; USAID, response to SIGAR data calls, Total Funding 117,259.70 9,480.46 3,502.96 10,042.67 6,069.97 10,510.54 16,712.33 15,861.81 14,646.73 9,630.93 6,811.83 6,223.97 5,789.21 1,976.26 1/10/2017, 10/15/2010, 1/15/2010, and 10/9/2009; DOJ, response to SIGAR data calls, 12/16/2016 and 7/7/2009; USDA, response to SIGAR data call, 4/2009; DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2016,” 1/17/2017; OSD Comptroller, 16-22 PA: Omnibus 2016 Prior Approval Request, 6/30/2016; Pub. L. Nos. 114-113, 113-235, 113- 76, 113-6, 112-74, 112-10, 111-212, 111-118. 222 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION APPENDICES

U.S. FUNDING SOURCES AGENCY Total FY 2002–05 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017a Security Afghanistan Security Forces Fund (ASFF) DOD 66,021.96 995.00 1,908.13 7,406.40 2,750.00 5,606.94 9,166.77 10,619.28 9,200.00 4,946.20 3,962.34 3,939.33 3,652.26 1,869.31 Train & Equip (DOD) DOD 440.00 440.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Foreign Military Financing (FMF) State 1,059.14 1,059.14 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 International Military Education and Training (IMET) State 17.07 2.18 0.98 1.19 1.66 1.40 1.76 1.56 1.18 1.42 1.50 1.05 1.20 0.00 Voluntary Peacekeeping (PKO) State 69.33 69.33 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Afghanistan Freedom Support Act (AFSA) DOD 550.00 550.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Drug Interdiction & Counter-Drug Activities (DOD CN) DOD 3,016.11 296.34 108.05 290.97 192.81 230.06 392.27 379.83 472.99 255.81 238.96 0.00 138.76 19.26 Total - Security 71,173.61 3,411.98 2,017.17 7,698.57 2,944.47 5,838.40 9,560.80 11,000.67 9,674.16 5,203.44 4,202.80 3,940.38 3,792.22 1,888.57 Governance & Development Commander's Emergency Response Program (CERP) DOD 3,684.96 176.00 215.00 209.00 488.33 550.67 1,000.00 400.00 400.00 200.00 30.00 10.00 5.00 0.96 Afghanistan Infrastructure Fund (AIF) DOD 988.50 0.00 0.00 0.00 0.00 0.00 0.00 299.00 400.00 145.50 144.00 0.00 0.00 0.00 Task Force for Business and Stability Operations (TFBSO) DOD 822.85 0.00 0.00 0.00 0.00 14.44 59.26 239.24 245.76 138.20 122.24 3.72 0.00 0.00 Economic Support Fund (ESF) USAID 19,411.27 2,531.05 473.39 1,224.75 1,399.51 2,077.48 3,346.00 2,168.51 1,836.76 1,802.65 907.00 831.90 812.27 0.00 Development Assistance (DA) USAID 886.50 383.18 185.08 166.81 149.43 0.40 0.30 0.00 0.00 0.35 0.00 0.95 0.00 0.00 Child Survival & Health (CSH + GHAI) USAID 554.63 128.60 41.45 100.77 63.04 58.23 92.30 69.91 0.00 0.25 0.01 0.06 0.00 0.00 Commodity Credit Corp (CCC) USAID 31.48 8.80 0.00 0.00 10.77 4.22 4.22 3.09 0.38 0.00 0.00 0.00 0.00 0.00 USAID (other) USAID 52.08 5.50 0.00 0.00 21.96 2.81 4.90 6.25 7.10 1.84 0.80 0.82 0.10 0.00 Non-Proliferation, Antiterrorism, Demining & Related (NADR) State 730.94 186.25 35.72 36.72 29.72 59.92 70.74 69.30 65.32 52.60 43.20 43.50 37.96 0.00 Provincial Reconstruction Team Advisors USDA 5.70 0.00 0.00 0.00 0.00 5.70 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Treasury Technical Assistance Treasury 4.45 2.91 0.19 0.13 0.75 0.47 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 International Narcotics Control & Law Enforcement (INCLE) State 4,875.86 989.28 232.65 251.74 307.56 493.90 589.00 400.00 357.92 593.81 225.00 250.00 185.00 0.00 Drug Enforcement Administration (DEA) DOJ 234.02 23.93 23.66 20.38 40.59 18.88 19.20 18.70 18.70 17.00 18.70 9.05 3.31 1.93 Total - Governance & Development 32,283.23 4,435.52 1,207.14 2,010.30 2,511.66 3,287.12 5,185.92 3,673.99 3,331.93 2,952.19 1,490.96 1,149.99 1,043.63 2.88 Humanitarian P.L. 480 Title I USDA 5.00 5.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 P.L. 480 Title II USAID 891.28 254.80 56.60 60.00 60.00 177.00 58.13 112.55 0.00 46.20 66.00 0.00 0.00 0.00 Disaster Assistance (IDA) USAID 633.76 298.23 0.04 0.03 16.84 27.13 29.61 66.23 56.00 21.50 28.19 25.71 39.89 24.38 Transition Initiatives (TI) USAID 37.59 32.58 0.00 0.00 0.00 0.75 0.85 1.08 0.63 0.32 0.83 0.52 0.04 0.00 Migration & Refugee Assistance (MRA) State 1144.17 313.00 41.80 54.00 44.25 76.79 80.93 65.00 99.56 76.07 107.89 129.27 55.61 0.00 Emergency Refugee & Migration Assistance (ERMA) State 25.20 25.00 0.00 0.00 0.00 0.20 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Food for Progress USDA 109.49 44.14 23.24 9.47 20.55 12.09 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 416(b) Food Aid USDA 95.18 95.18 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Food for Education USDA 50.49 25.41 25.08 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Emerson Trust USDA 22.40 0.00 0.00 0.00 22.40 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total - Humanitarian 3,014.55 1,093.33 146.76 123.50 164.04 293.96 169.52 244.85 156.18 144.09 202.91 155.50 95.54 24.38 Civilian Operations Oversight 458.35 0.00 0.00 2.50 14.30 25.20 34.40 37.20 59.00 58.70 62.65 68.60 62.37 33.43 Other 10,329.95 539.63 131.90 207.80 435.51 1,065.86 1,761.70 905.10 1,425.47 1,272.52 852.52 909.50 795.45 27.00 Total - Civilian Operations 10,788.31 539.63 131.90 210.30 449.81 1,091.06 1,796.10 942.30 1,484.47 1,331.22 915.17 978.10 857.81 60.44 Total Funding 117,259.70 9,480.46 3,502.96 10,042.67 6,069.97 10,510.54 16,712.33 15,861.81 14,646.73 9,630.93 6,811.83 6,223.97 5,789.21 1,976.26

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 223 APPENDICES

APPENDIX C SIGAR WRITTEN PRODUCTS* SIGAR Audits Completed Performance Audits SIGAR completed two performance audits during this reporting period.

COMPLETED SIGAR PERFORMANCE AUDITS AS OF MARCH 31, 2017 Report Identifier Report Title Date Issued Afghan National Defense and Security Forces: DOD Needs to SIGAR 17-40-AR 3/2017 Improve Management and Oversight of Uniforms and Equipment Land Reform in Afghanistan: Full Impact and Sustainability of SIGAR 17-27-AR 2/2017 $41.2 Million USAID Program is Unknown

New Performance Audits SIGAR initiated two performance audits during this reporting period.

NEW SIGAR PERFORMANCE AUDITS AS OF MARCH 31, 2017 Project Identifier Project Title Date Initiated Afghan Air Force’s Ability to Operate and Maintain U.S.-Provided SIGAR 120A 3/2017 Aircraft U.S. Army Corps of Engineers’ Local National Quality Assurance SIGAR 119A 3/2017 Program

Ongoing Performance Audits SIGAR had 11 performance audits in progress during this reporting period.

ONGOING SIGAR PERFORMANCE AUDITS AS OF MARCH 31, 2017

Project Identifier Project Title Date Initiated SIGAR 118A DOD Efforts to Advise the Afghan Ministries of Defense and Interior 1/2017 SIGAR 117A USAID’s Regional Agricultural Development Program 12/2016 SIGAR 116A Promoting Gender Equity in National Priority Programs (Promote) 11/2016 U.S. Government Efforts to Increase the Supply, Quantity, and SIGAR 115A 4/2016 Distribution of Electric Power from the Kajaki Dam Task Force for Business and Stability Operations’ Programs and SIGAR 114A 3/2016 Activities in Afghanistan from 2010 through 2014 Administration, Monitoring, and Reporting of the Afghanistan SIGAR 112A 12/2015 Reconstruction Trust Fund SIGAR 111A Award, Administration, and Performance of Legacy Research Contracts 8/2015 Effectiveness of the Commander’s Emergency Response Program SIGAR 110A 8/2015 in Afghanistan U.S. Salary Supplements for Afghan Government Employees and SIGAR 109A 6/2015 Technical Advisors SIGAR 102A Afghanistan Infrastructure Fund Follow-Up 11/2014 DOD Oversight of Infrastructure Projects Transferred to the SIGAR 100A 8/2014 Afghan Government

* SIGAR may also report on products and events occurring after March 31, 2017, up to the publication date.

224 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION APPENDICES

Completed Financial Audits SIGAR completed five financial audits during this reporting period.

COMPLETED SIGAR FINANCIAL AUDITS AS OF MARCH 31, 2017 Report Identifier Report Title Date Issued USAID’s Commercial Horticulture and Agriculture Marketing Program: SIGAR 17-39-FA 04/2017 Audit of Costs Incurred by Roots of Peace USAID’s Results Tracking Phase II (SUPPORT II): Audit of Costs Incurred SIGAR 17-38-FA 04/2017 by Checchi and Company Consulting Inc. USAID’s Kandahar Food Zone Program: Audit of Costs Incurred by SIGAR 17-35-FA 04/2017 International Relief and Development Inc. USAID’s Financial Access for Investing in the Development of SIGAR 17-33-FA Afghanistan Project: Audit of Costs Incurred by Chemonics 03/2017 International Inc. Afghanistan Mine, Battle Area and Range Clearance Operation Phase II SIGAR 17-31-FA 03/2017 Effort I: Audit of Costs Incurred by Janus Global Operations LLC New Financial Audits SIGAR initiated nine financial audits during this reporting period.

NEW SIGAR FINANCIAL AUDITS AS OF MARCH 31, 2017 Project Identifier Project Title Date Initiated Construction of Ministry of Defense Headquarters Support and SIGAR F-119 3/2017 Security Brigade Expansion Phase II SIGAR F-118 Construction of Ministry of Defense Phase I 3/2017 SIGAR F-117 Freedom of Maneuver (FOM) Program 3/2017 Combined Security Transition Command-Afghanistan, Afghanistan SIGAR F-116 3/2017 Ministry of Defense and Afghan National Army Program Support Afghanistan National Army Communications Equipment Service SIGAR F-115 Mentoring, Systems Engineering and Technical Assistance, and Training 3/2017 and Maintenance Radio Sustainment SIGAR F-114 Afghan Engineering Support Program 2/2017 Mining Investment and Development for Afghanistan Stability SIGAR F-113 2/2017 (MIDAS) Project SIGAR F-112 Agriculture Credit Enhancement (ACE) Program in Afghanistan 2/2017 SIGAR F-111 Early Grade Reading (EGR) Survey 2/2017 Ongoing Financial Audits SIGAR had 16 financial audits in progress during this reporting period.

ONGOING SIGAR FINANCIAL AUDITS AS OF MARCH 31, 2017 Project Identifier Project Title Date Initiated DOD Contract with Friends of the American University of Afghanistan SIGAR F-110 11/2016 for Village Stability Operations Project Subject Matter Experts DOD Contract with Alion Science and Technology Corporation for SIGAR F-109 11/2016 Kabul Business Incubator DOD Contract with Development Alternatives Inc. for Professional SIGAR F-108 11/2016 Business Analysis, Advisory and Assistance Support Services DOD Contract with SRK Consulting Inc. for Mineral Tender SIGAR F-107 11/2016 Development and Geological Services DOD Contract with Leidos Inc. (previously SAIC) for Economic SIGAR F-106 11/2016 Impact Assessment Continued on the next page

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 225 APPENDICES

ONGOING SIGAR FINANCIAL AUDITS AS OF MARCH 31, 2017 (CONTINUED) Project Identifier Project Title Date Initiated DOD Contract with aXseum Solutions LLC for Banking and Financial SIGAR F-105 11/2016 Infrastructure Development DOD Contract with Curtis, Mallet-Prevost, Colt & Mosle LLP for SIGAR F-104 11/2016 Advisory Services and International Hydrocarbons Sector DOD Contract with AAR Parts Trading Inc.; AAR Defense Systems and SIGAR F-103 Logistics Subsidiary for C-130H Contractor Logistic Support for the 6/2016 Afghan Air Force DOD Contract with Sierra Nevada Corp. for Afghan National Army SIGAR F-102 Special Operations Forces Contractor Logistics Support for PC-12 6/2016 Fixed Wing Aircraft DOD Contract with Lockheed Martin Integrated Systems Inc. for SIGAR F-101 Afghan Air Force Spare Parts Surge Buy in Support of the Afghan 6/2016 Security Forces DOD Contract with Textron Inc. for Training and Logistics Support with SIGAR F-100 6/2016 the Afghan National Army Mobile Strike Force Vehicle Program DOD Contract with Textron Inc. for Mobile Strike Force Vehicle Interim SIGAR F-099 6/2016 Contractor Training Support for the Afghan National Army SIGAR F-098 State Grant with Sesame Street for Media Programs 5/2016 USAID Cooperative Agreement with Volunteers for Economic Growth SIGAR F-095 Alliance (VEGA) for Assistance in Building Afghanistan by Developing 3/2016 Enterprise (ABADE) USAID Cooperative Agreement with Management Sciences for Health SIGAR F-093 3/2016 (MSH) for Strengthening Pharmaceutical Systems (SPS) USAID Implementation Letter with Da Afghanistan Breshna Sherkat SIGAR F-091 3/2016 (DABS) for Kajaki Dam Unit 2 SIGAR Inspections Completed Inspections SIGAR completed two inspection reports this reporting period.

COMPLETED SIGAR INSPECTIONS AS OF MARCH 31, 2017 Product Identifier Product Title Date Issued SIGAR 17-41-IP Balkh University Women’s Dormitories 4/2017 SIGAR 17-36-IP Baghlan Prison 1/2017

New Inspections SIGAR initiated six inspections during this reporting period.

NEW SIGAR INSPECTIONS AS OF MARCH 31, 2017 Project Identifier Project Title Date Initiated Inspection of Women’s Dormitory at the American University of SIGAR I-047 3/2017 Afghanistan Inspection of the Officer Logistics School at the Kabul Military SIGAR-I-046 2/2017 Training Center SIGAR-I-045 Inspection of the Marshal Fahim National Defense University 2/2017 SIGAR-I-044 Inspection of the Zarang Border Crossing Point 2/2017 SIGAR-I-043 Inspection of the Kang Border Patrol Company Headquarters 2/2017 SIGAR-I-042 Inspection of the Wardak Prison 2/2017

226 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION APPENDICES

SIGAR Special Projects Completed Special Projects SIGAR completed four Special Projects products this reporting period.

COMPLETED SIGAR SPECIAL PROJECTS AS OF MARCH 31, 2017 Product Identifier Product Title Date Issued Good Performers Initiative Status of Seven Completed Projects in SIGAR 17-37-SP 04/2017 Khowst Province SIGAR 17-34-SP USAID Supported Health Facilities in Ghazni Province 03/2017 SIGAR 17-32-SP Observations from Site Visits at 26 Schools 03/2017 Good Performers Initiative Status of Six Completed Projects in SIGAR 17-26-SP 02/2017 Ghazni Province

Special Projects Inquiry Letters SIGAR completed three Special Projects inquiry letters this reporting period.

ONGOING SIGAR SPECIAL PROJECTS INQUIRY LETTERS AS OF MARCH 31, 2017 Product Identifier Product Title Date Issued SIGAR 17-30-SP USAID Infrastructure Projects 2/2017 SIGAR 17-29-SP State Infrastructure Projects 2/2017 SIGAR 17-28-SP DOD Infrastructure Projects 2/2017

SIGAR Lessons Learned Projects New Lessons Learned Project SIGAR initiated one new Lessons Learned project this reporting period.

NEW SIGAR LESSONS LEARNED PROJECT AS OF MARCH 31, 2017 Project Identifier Project Title Date Issued SIGAR LL-08 Monitoring & Evaluation 4/2017

Ongoing Lessons Learned Projects SIGAR has six ongoing Lessons Learned projects this reporting period.

ONGOING SIGAR LESSONS LEARNED PROJECTS AS OF MARCH 31, 2017 Project Identifier Project Title Date Initiated SIGAR LL-07 Stabilization 2/2016 SIGAR LL-06 Security Sector Reconstruction 2/2016 SIGAR LL-05 Private Sector Development and Economic Growth 10/2015 SIGAR LL-04 Counternarcotics in Afghanistan Reconstruction 4/2015 SIGAR LL-02 U.S. Coordination with External Partners in Administering Aid 12/2014 SIGAR LL-01 Interagency Coordination on Strategy and Planning 12/2014

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 227 APPENDICES

APPENDIX D

SIGAR INVESTIGATIONS AND HOTLINE SIGAR Investigations This quarter, SIGAR opened 15 new investigations and closed 14, bringing the total number of ongoing investigations to 262. Of the new investigations, most were related to procurement/contract fraud, as shown in Figure D.1. Of the closed investigations, most were closed due to unfounded allegations, as shown in Figure D.2.

FIGURE D.1 FIGURE D.2

SIGAR NEW INVESTIGATIONS, SIGAR INVESTIGATIONS: CLOSED INVESTIGATIONS, JANUARY 1–MARCH 31, 2017 JANUARY 1–MARCH 31, 2017

Total: 15 Lack of Investigative Merit 3 2

Administrative 3

Other Unfounded Allegations 5 Procurement/ 5 Contract 8 Convictions 4 – 1 4 Corruption Theft 1 1 Total: 14

Source: SIGAR Investigations Directorate, 04/07/2017 Source: SIGAR Investigations Directorate, 04/07/2017.

228 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION APPENDICES

SIGAR Hotline This quarter, the directorate processed 273 complaints, most of which are under review or were closed, as shown in Figure D.3. The SIGAR Hotline received 118 complaints this quarter, as seen in Figure D.4. In addition to working on new complaints, the Investigations Directorate continued its work on complaints received prior to January 1, 2017.

FIGURE D.3

STATUS OF SIGAR HOTLINE COMPLAINTS: JANUARY 1–MARCH 31, 2017

Complaints Received 47 118 Complaints (Open) 24 Gen Info File (Closed) 120 Investigation (Opened) 2 Investigation (Closed) 2 Referral (Open) 0 Referral (Closed) 7 Suspension & Debarment (Closed) 0 0 20 40 60 80 100 120 140 Total: 273

Note: 118 complaints received during quarter; total includes status changes for complaints made in earlier periods. Source: SIGAR Investigations Directorate, 4/11/2017. SIGAR SUSPENSIONS AND DEBARMENTS Table D.1 is a comprehensive list of finalized suspensions, debarments, and special entity designations relating to SIGAR’s work in Afghanistan as of March 31, 2017. SIGAR lists its suspensions, debarments and special entity designations for historical purposes only. For the current status of any individual or entity listed herein as previously suspended, debarred or listed as a special entity designation, please consult the System for Award Management, www.sam.gov. Entries appearing in both the suspension and debarment sections are based upon their placement in suspended status following criminal indict- ment or determination of non-responsibility by agency suspension and debarment official. Final debarment was imposed following criminal con- viction in U.S. Federal District Court and/or final determination by agency suspension and debarment official regarding term of debarment.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 229 APPENDICES

TABLE D.1

SPECIAL ENTITY DESIGNATIONS, SUSPENSIONS, AND DEBARMENTS AS OF MARCH 31, 2017 Special Entity Designations Arvin Kam Construction Company Khan, Haji Mohammad Almas Saadat, Vakil Arvin Kam Group LLC, d.b.a. “Arvin Kam Group Noh-E Safi Mining Company Triangle Technologies Security,” d.b.a. “Arvin Kam Group Foundation,” d.b.a. Noor Rahman Company Wasim, Abdul Wakil “Arvin Global Logistics Services Company” Noor Rahman Construction Company Zaland, Yousef Ayub, Mohammad FIGURE D.4 Nur Rahman Group, d.b.a. “NUCCL Construction Zurmat Construction Company Fruzi, Haji Khalil Company,” d.b.a. “RUCCL Rahman Umar Construction Zurmat Foundation Haji Amir Muhammad Company,” d.b.a. “Rahman Trading and General SOURCE OF SIGAR HOTLINE COMPLAINTS, Zurmat General Trading Haji Dhost Mohammad Zurmat Construction Logistics Company LLC JANUARY 1–MARCH 31, 2017 Zurmat Group of Companies, d.b.a. “Zurmat LLC” Company Rahman, Nur, a.k.a. “Noor Rahman,” a.k.a. “Noor Jan, Nurullah Rahman Safa” Zurmat Material Testing Laboratory Total: 118 Rhaman, Mohammad Suspensions Al-Watan Construction Company Sharpway Logistics Rivera-Medina, Franklin Delano Basirat Construction Firm Electronic United States California Logistics Company Peace Thru Business Brophy, Kenneth 113 Yousef, Najeebullah Pudenz, Adam Jeff Julias Naqibullah, Nadeem Rahimi, Mohammad Edris Elham, Yaser, a.k.a. “Najibullah Saadullah” Rahman, Obaidur Wooten, Philip Steven Everest Faizy Logistics Services Campbell, Neil Patrick Domineck, Lavette Kaye Faizy Elham Brothers Ltd. Borcata, Raul A. Markwith, James Faizy, Rohullah Close, Jarred Lee Phone WrittenAll Points International Distributors Inc. Hekmat Shadman General Trading LLC Logistical Operations3 Worldwide 2 Cipolla, James Hekmat Shadman Ltd., d.b.a. “Hikmat Robinson, Franz Martin Hercules Global Logistics Shadman Ltd.” Source: SIGAR Investigations Directorate, 4/11/2017. Taylor, Zachery Dustin Schroeder, Robert Hikmat Shadman Construction and Supply Company Aaria Group Construction Company AISC LLC Hikmat Shadman Logistics Services Company, d.b.a. “Hikmat Shadman Commerce Construction Aaria Group American International Security Corporation and Supply Company,” d.b.a. “Hikmat Shadman Aaria Herai General Trading Brothers, Richard S. Commerce Construction Services” Aaria M.E. General Trading LLC David A Young Construction & Renovation Inc. Saif Hikmat Construction Logistic Services and Aaria Middle East Force Direct Solutions LLC Supply Co. Aaria Middle East Company LLC Harris, Christopher Shadman, Hikmatullah, a.k.a. “Hikmat Shadman,” Aaria Middle East Company Ltd. – Herat Hernando County Holdings LLC a.k.a. “Haji Hikmatullah Shadman,” a.k.a. “Hikmatullah Saadulah” Aaria Supplies Company Ltd Hide-A-Wreck LLC Travis, James Edward Aaria Supply Services and Consultancy Panthers LLC Sherzai, Akbar Ahmed Aftech International Paper Mill Village Inc Bertolini, Robert L. Aftech International Pvt. Ltd. Shroud Line LLC Kahn, Haroon Shams, a.k.a. “Haroon Shams” Alam, Ahmed Farzad Spada, Carol Shams Constructions Limited Albahar Logistics Taylor, Michael Shams General Services and Logistics Unlimited American Aaria Company LLC Welventure LLC Shams Group International, d.b.a. “Shams Group American Aaria LLC World Wide Trainers LLC International FZE” Barakzai, Nangialai Young, David Shams London Academy Formid Supply and Services Espinoza, Mauricio Shams Production Greenlight General Trading Long, Tonya Shams Welfare Foundation Kabul Hackle Logistics Company Brophy, Kenneth Michael Autry, Cleo Brian

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TABLE D.1 (CONTINUED)

SPECIAL ENTITY DESIGNATIONS, SUSPENSIONS, AND DEBARMENTS AS OF MARCH 31, 2017 (CONTINUED) Suspensions (continued) Chamberlain, William Todd Mayberry, Teresa San Francisco for Housing Company Cook, Jeffrey Arthur Addas, James Sura Al Mustakbal Harper, Deric Tyron Advanced Ability for U-PVC Top Techno Concrete Batch Swim, Alexander Al Bait Al Amer Edmondson, Jeffrey B. Walls, Barry Lee, Jr. Al Iraq Al Waed Lugo, Emanuel Ciampa, Christopher Al Quraishi Bureau Montague, Geoffrey K. Casellas, Luis Ramon Al Zakoura Company Pena, Ramiro International Contracting and Development Al-Amir Group LLC Ware, Marvin Sobh, Adeeb Nagib, a.k.a. “Ali Sobh” Al-Noor Contracting Company Green, Robert Warren Stallion Construction and Engineering Group Al-Noor Industrial Technologies Company Bailly, Louis Matthew Wazne Group Inc., d.b.a. “Wazne Wholesale” California for Project Company Albright, Timothy H. Wazne, Ayman, a.k.a. “Ayman Ibrahim Wazne” Civilian Technologies Limited Company Bailly, Louis Matthew Hampton, Seneca Darnell Industrial Techniques Engineering Bunch, Donald P. Green, George E. Electromechanically Company Epps, Willis Tran, Anthony Don Jamil, Omar K. Kline, David Vergez, Norbert Pulsars Company Morgan, Sheldon J. Debarments Farooqi, Hashmatullah Qasimi, Mohammed Indress Hamdard, Mohammad Yousuf Hamid Lais Construction Company Radhi, Mohammad Khalid Kunari, Haji Pir Mohammad Hamid Lais Group Safi, Fazal Ahmed Mushfiq, Muhammad Jaffar Lodin, Rohullah Farooqi Shin Gul Shaheen, a.k.a. “Sheen Gul Shaheen” Mutallib, Abdul Bennett & Fouch Associates LLC Espinoza-Loor, Pedro Alfredo Nasrat, Sami Brandon, Gary Campbell, Neil Patrick National General Construction Company K5 Global Navarro, Wesley Passerly, Ahmaad Saleem Ahmad, Noor Hazrati, Arash Rabi, Fazal Noor Ahmad Yousufzai Construction Company Midfield International Rahman, Atta Ayeni, Sheryl Adenike Moore, Robert G. Rahman, Fazal Cannon, Justin Noori, Noor Alam, a.k.a. “Noor Alam” Roshandil, Mohammad Ajmal Constantino, April Anne Northern Reconstruction Organization Saber, Mohammed Constantino, Dee Shamal Pamir Building and Road Construction Company Safi, Azizur Rahman Constantino, Ramil Palmes Wade, Desi D. Safi, Matiullah Crilly, Braam Blue Planet Logistics Services Sahak, Sher Khan Drotleff, Christopher Mahmodi, Padres Shaheed, Murad Fil-Tech Engineering and Construction Company Mahmodi, Shikab Shirzad, Daulet Khan Handa, Sdiharth Saber, Mohammed Uddin, Mehrab Jabak, Imad Watson, Brian Erik Watson, Brian Erik Jamally, Rohullah Abbasi, Shahpoor Wooten, Philip Steven Khalid, Mohammad Amiri, Waheedullah Espinoza, Mauricio Khan, Daro Atal, Waheed Alam, Ahmed Farzad Mariano, April Anne Perez Daud, Abdulilah Greenlight General Trading McCabe, Elton Maurice Dehati, Abdul Majid Aaria Middle East Company LLC Mihalczo, John Fazli, Qais Aaria Middle East Company Ltd. – Herat

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TABLE D.1 (CONTINUED)

SPECIAL ENTITY DESIGNATIONS, SUSPENSIONS, AND DEBARMENTS AS OF MARCH 31, 2017 (CONTINUED) Debarments (continued) Aaria M.E. General Trading LLC Asmatullah, Mahmood, a.k.a. "Mahmood" Nordloh, Geoffrey Aaria Middle East Khan, Gul Kieffer, Jerry Barakzai, Nangialai Khan, Solomon Sherdad, a.k.a. "Solomon" Johnson, Angela Formid Supply and Services Mursalin, Ikramullah, a.k.a. "Ikramullah" CNH Development Company LLC Aaria Supply Services and Consultancy Musafer, Naseem, a.k.a. "Naseem" Johnson, Keith Kabul Hackle Logistics Company Ali, Esrar Military Logistic Support LLC Yousef, Najeebullah Gul, Ghanzi Eisner, John Aaria Group Luqman Engineering Construction Company, d.b.a. Taurus Holdings LLC Aaria Group Construction Company “Luqman Engineering” Brophy, Kenneth Michael Aaria Supplies Company Ltd. Safiullah, a.k.a. "Mr. Safiullah" Abdul Haq Foundation Rahimi, Mohammad Edris Sarfarez, a.k.a."Mr. Sarfarez" Adajar, Adonis All Points International Distributors Inc. Wazir, Khan Calhoun, Josh W. Hercules Global Logistics Akbar, Ali Clark Logistic Services Company, d.b.a. "Clark Schroeder, Robert Crystal Construction Company, d.b.a. “Samitullah Road Construction Company" Construction Company” Helmand Twinkle Construction Company Farkas, Janos Samitullah (Individual uses only one name) Waziri, Heward Omar Flordeliz, Alex F. Ashna, Mohammad Ibrahim, a.k.a. “Ibrahim” Zadran, Mohammad Knight, Michael T., II Gurvinder, Singh Afghan Mercury Construction Company, d.b.a. “Afghan Lozado, Gary Mercury Construction & Logistics Company” Jahan, Shah Mijares, Armando N., Jr. Mirzali Naseeb Construction Company Shahim, Zakirullah a.k.a. “Zakrullah Shahim”, a.k.a. Mullakhiel, Wadir Abdullahmatin “Zikrullah Shahim” Montes, Diyana Rainbow Construction Company Alyas, Maiwand Ansunullah a.k.a. “Engineer Maiwand Naseeb, Mirzali Sardar, Hassan, a.k.a. “Hassan Sardar Inqilab” Alyas” Robinson, Franz Martin Shah, Mohammad Nadir, a.k.a. "Nader Shah" BMCSC Smith, Nancy Tito, Regor Maiwand Haqmal Construction and Supply Company Sultani, Abdul Anas a.k.a. “Abdul Anas” Brown, Charles Phillip New Riders Construction Company, d.b.a. “Riders Faqiri, Shir Construction Company,” d.b.a. “New Riders Construction Sheren, Fasela, a.k.a. “Sheren Fasela” Hosmat, Haji and Services Company” Anderson, Jesse Montel Jim Black Construction Company Riders Constructions, Services, Logistics and Charboneau, Stephanie, a.k.a. “Stephanie Shankel” Arya Ariana Aryayee Logistics, d.b.a. “AAA Logistics,” d.b.a. Transportation Company Hightower, Jonathan “Somo Logistics” Riders Group of Companies Khan, Noor Zali, a.k.a. "Wali Kahn Noor" Garst, Donald Domineck, Lavette Kaye Saheed, a.k.a. "Mr. Saheed;" a.k.a. "Sahill;" a.k.a. Mukhtar, Abdul a.k.a. “Abdul Kubar” Markwith, James "Ghazi-Rahman" Noori Mahgir Construction Company Martinez, Rene Weaver, Christopher Noori, Sherin Agha Maroof, Abdul Al Kaheel Oasis Services Long, Tonya Qara, Yousef Al Kaheel Technical Service Isranuddin, Burhanuddin Royal Palace Construction Company CLC Construction Company Matun, Navidullah, a.k.a. “Javid Ahmad” Bradshaw, Christopher Chase CLC Consulting LLC Matun, Wahidullah Zuhra Productions Complete Manpower Solutions Navid Basir Construction Company Zuhra, Niazai Mohammed, Masiuddin, a.k.a. “Masi Mohammed” Navid Basir JV Gagar Baba Construction Company Boulware, Candice a.k.a. “Candice Joy Dawkins" Rhoden, Bradley L., a.k.a. “Brad L. Rhoden” NBCC & GBCC JV Dawkins, John Rhoden, Lorraine Serena Noori, Navid Mesopotamia Group LLC Royal Super Jet General Trading LLC

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TABLE D.1 (CONTINUED)

SPECIAL ENTITY DESIGNATIONS, SUSPENSIONS, AND DEBARMENTS AS OF MARCH 31, 2017 (CONTINUED) Debarments (continued) Super Jet Construction Company Gibani, Marika LTCCORP O&G LLC Super Jet Fuel Services Haidari, Mahboob LTCCORP Renewables LLC Super Jet Group Latifi, Abdul LTCCORP Inc. Super Jet Tours LLC, d.b.a. “Super Jet Travel and Holidays McCammon, Christina LTCCORP/Kaya Dijbouti LLC LLC” Mohibzada, Ahmadullah, a.k.a. "Ahmadullah Mohebzada" LTCCORP/Kaya East Africa LLC Super Solutions LLC Neghat, Mustafa LTCCORP/Kaya Romania LLC Abdullah, Bilal Qurashi, Abdul LTCCORP/Kaya Rwanda LLC Farmer, Robert Scott Raouf, Ashmatullah LTCORP Technology LLC Mudiyanselage, Oliver Shah, David Toltest Inc., d.b.a. “Wolverine Testing and Engineering,” Kelly, Albert, III Touba, Kajim d.b.a. “Toledo Testing Laboratory,” d.b.a. “LTC,” d.b.a. “LTC Corp,” d.b.a. “LTC Corp Ohio,” d.b.a. “LTC Ohio" Ethridge, James Zahir, Khalid Toltest/Desbuild Germany JV LLC Fernridge Strategic Partners Aryubi, Mohammad Raza Samim Veterans Construction/Lakeshore JV LLC AISC LLC Atlas Sahil Construction Company Afghan Royal First Logistics, d.b.a. “Afghan Royal” American International Security Corporation Bab Al Jazeera LLC American Barriers David A Young Construction & Renovation Inc. Emar-E-Sarey Construction Company Arakozia Afghan Advertising Force Direct Solutions LLC Muhammad, Pianda Dubai Armored Cars Harris, Christopher Sambros International, d.b.a. “Sambros International Ltd,” Hernando County Holdings LLC d.b.a. “Sambros-UK JV” Enayatullah, son of Hafizullah Hide-A-Wreck LLC Sambros JV Emar-E-Sarey Construction Company, d.b.a. Farhas, Ahmad Panthers LLC “Sambros JV ESCC” Inland Holdings Inc. Paper Mill Village Inc. Antes, Bradley A. Intermaax, FZE Shroud Line LLC Lakeshore Engineering & Construction Afghanistan Inc., Intermaax Inc. d.b.a. “Lakeshore General Contractors Inc.” Spada, Carol Karkar, Shah Wali Lakeshore Engineering Services Inc. Welventure LLC Sandman Security Services Lakeshore Engineering Services/Toltest JV LLC World Wide Trainers LLC Siddiqi, Atta Lakeshore Toltest – Rentenbach JV LLC Young, David Andrew Specialty Bunkering Lakeshore Toltest Corporation, d.b.a. “Lakeshore Group,” Woodruff and Company Spidle, Chris Calvin d.b.a. “LTC Newco d.b.a. “LTC CORP Michigan,” d.b.a. Vulcan Amps Inc. Travis, James Edward “Lakeshore Toltest KK” Worldwide Cargomasters Khairfullah, Gul Agha Lakeshore Toltest Guam LLC Aziz, Haji Abdul, a.k.a. “Abdul Aziz Shah Jan,” a.k.a. “Aziz” Khalil Rahimi Construction Company Lakeshore Toltest JV LLC Castillo, Alfredo, Jr. Momand, Jahanzeb, a.k.a. “Engineer Jahanzeb Momand” Lakeshore Toltest RRCC JV LLC Abbasi, Asim Yar-Mohammad, Hazrat Nabi Lakeshore/Walsh JV LLC Muturi, Samuel Walizada, Abdul Masoud, a.k.a. "Masood Walizada" LakeshoreToltest METAG JV LLC Mwakio, Shannel Alizai, Zarghona LTC & Metawater JV LLC Ahmad, Jaweed Aman, Abdul LTC Holdings Inc. Ahmad, Masood Anwari, Laila LTC Italia SRL A & J Total Landscapes Anwari, Mezhgan LTC Tower General Contractors LLC Aryana Green Light Support Services Anwari, Rafi LTCCORP Commercial LLC Mohammad, Sardar, a.k.a. “Sardar Mohammad Barakzai” Arghandiwal, Zahra, a.k.a. "Sarah Arghandiwal" LTCCORP E&C Inc. Pittman, James C., a.k.a. “Carl Pittman” Azizi, Farwad, a.k.a. "Farwad Mohammad Azizi" LTCCORP Government Services - OH Inc. Poaipuni, Clayton Bashizada, Razia LTCCORP Government Services Inc. Wiley, Patrick Coates, Kenneth LTCCORP Government Services-MI Inc.

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TABLE D.1 (CONTINUED)

SPECIAL ENTITY DESIGNATIONS, SUSPENSIONS, AND DEBARMENTS AS OF MARCH 31, 2017 (CONTINUED) Debarments (continued) Crystal Island Construction Company Advanced Ability for U-PVC Khan, Amir, a.k.a. “Amir Khan Sahel” Afghan Columbia Constructon Company Al Bait Al Amer Sharq Afghan Logistics Company, d.b.a. “East Afghan Ahmadi, Mohammad Omid Al Iraq Al Waed Logistics Company” Dashti, Jamsheed Al Quraishi Bureau Hafizullah, Sayed; a.k.a. “Sadat Sayed Hafizullah”; a.k.a. “Sayed Hafizullah Delsooz” Hamdard, Eraj Al Zakoura Company Sadat Zohori Construction and Road Building Company; Hamidi, Mahrokh Al-Amir Group LLC d.b.a. “Sadat Zohori Cons Co.” Raising Wall Construction Company Al-Noor Contracting Company Abdullah, Son of Lal Gul Artemis Global Inc., d.b.a. “Artemis Global Logistics and Al-Noor Industrial Technologies Company Ahmad, Aziz Solutions,” d.b.a. “Artemis Global Trucking LLC” California for Project Company Ahmad, Zubir O’Brien, James Michael, a.k.a. “James Michael Wienert” Civilian Technologies Limited Company Aimal, Son of Masom Tamerlane Global Services Inc., d.b.a. “Tamerlane Industrial Techniques Engineering Electromechanically Ajmal, Son of Mohammad Anwar Global LLC,” d.b.a. “Tamerlane LLC,” d.b.a. “Tamerlane Company Technologies LLC” Fareed, Son of Shir Pena, Ramiro Jean-Noel, Dimitry Fayaz Afghan Logistics Services Pulsars Company Hampton, Seneca Darnell Fayaz, Afghan, a.k.a. “Fayaz Alimi,” a.k.a. “Fayaz, Son of San Francisco for Housing Company Dennis, Jimmy W. Mohammad” Sura Al Mustakbal Timor, Karim Gul, Khuja Top Techno Concrete Batch Wardak, Khalid Habibullah, Son of Ainuddin Albright, Timothy H. Rahmat Siddiqi Transportation Company Hamidullah, Son of Abdul Rashid Insurance Group of Afghanistan Siddiqi, Rahmat Haq, Fazal Ratib, Ahmad, a.k.a. “Nazari” Siddiqi, Sayed Attaullah Jahangir, Son of Abdul Qadir Jamil, Omar K. Umbrella Insurance Limited Company Kaka, Son of Ismail Rawat, Ashita Taylor, Michael Khalil, Son of Mohammad Ajan Casellas, Luis Ramon Gardazi, Syed Khan, Mirullah Saber, Mohammad a.k.a. “Saber,” a.k.a. “Sabir” Smarasinghage, Sagara Khan, Mukamal Zahir, Shafiullah Mohammad a.k.a. “Shafiullah,” a.k.a. Security Assistance Group LLC Khoshal, Son of Sayed Hasan “Shafie” Bailly, Louis Matthew Malang, Son of Qand Achiever’s International Ministries Inc., d.b.a. “Center for Masom, Son of Asad Gul Kumar, Krishan Achievement and Development LLC” Mateen, Abdul Raj, Janak Bickersteth, Diana Mohammad, Asghar Singh, Roop Bonview Consulting Group Inc. Mohammad, Baqi Masraq Engineering and Construction Company Fagbenro, Oyetayo Ayoola, a.k.a. “Tayo Ayoola Fagbenro” Mohammad, Khial Miakhil, Azizullah Global Vision Consulting LLC Mohammad, Sayed Stratton, William G HUDA Development Organization Mujahid, Son of Abdul Qadir Umeer Star Construction Company Strategic Impact Consulting, d.b.a. “Strategic Impact Zahir, Mohammad Ayub KarKon Afghanistan Material Testing Laboratory” Nangiali, Son of Alem Jan Marshal Afghan American Construction Company Davies, Simon Nawid, Son of Mashoq Marshal, Sayed Abbas Shah Gannon, Robert, W. Noorullah, Son of Noor Mohammad Peace Thru Business Gillam, Robert Qayoum, Abdul Pudenz, Adam Jeff Julias Mondial Defence Systems Ltd. Roz, Gul Green, Robert Warren Mondial Defense Systems USA LLC Shafiq, Mohammad Mayberry, Teresa Mondial Logistics Shah, Ahmad Addas, James Khan, Adam Shah, Mohammad Shah, Rahim

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TABLE D.1 (CONTINUED)

SPECIAL ENTITY DESIGNATIONS, SUSPENSIONS, AND DEBARMENTS AS OF MARCH 31, 2017 (CONTINUED) Debarments (continued) Sharif, Mohammad Zamir, Son of Kabir Hamidi, Abdul Basit; a.k.a. Basit Hamidi Waheedullah, Son of Sardar Mohammad Rogers, Sean Kakar, Rohani; a.k.a. “Daro Khan Rohani” Wahid, Abdul Slade, Justin Mohammad, Abdullah Nazar Wais, Gul Morgan, Sheldon J. Nasir, Mohammad Wali, Khair Dixon, Reginald Wali Eshaq Zada Logistics Company; d.b.a. “Wali Wali, Sayed Emmons, Larry Ashqa Zada Logistics Company”; d.b.a. “Nasert Nawazi Transportation Company” Wali, Taj Epps, Willis Ware, Marvin Yaseen, Mohammad Etihad Hamidi Group; d.b.a. “Etihad Hamidi Trading, Belgin, Andrew Yaseen, Son of Mohammad Aajan Transportation, Logistics and Construction Company” Zakir, Mohammad Etihad Hamidi Logistics Company; d.b.a. “Etihad Hamidi Transportation, Logistic Company Corporation”

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APPENDIX E ABBREVIATIONS AND ACRONYMS

ACRONYM OR ABBREVIATION DEFINITION AABIS Afghan Automated Biometric Identification System AAEP Afghanistan Agriculture Extension Project AAF Afghan Air Force AAN Afghanistan Analysts Network AATP Afghan Aviation Transition Plan ABADE Assistance in Building Afghanistan by Developing Enterprises ABP Afghan Border Police ACE Agricultural Credit Enhancement ACEP Afghan Civic Engagement Program ACF Abdulhai Gardezi Construction Firm ACJC Anti-Corruption Justice Center AD alternative-development ADALAT Assistance for Development of Afghan Legal Access and Transparency ADF Agricultural Development Fund AERCA Advancing Effective Reforms for Civic Accountability (formerly Afghanistan Electoral Reform and Civic Advocacy Program) AFMIS Afghan Financial Management Information System AFN afghani (currency) AFSA Afghanistan Freedom Support Act AGO Attorney General’s Office AHRIMS Afghan Human Resource Information Management System AIF Afghanistan Infrastructure Fund AITF Afghanistan Infrastructure Trust Fund ALBA Assistance to Legislative Bodies of Afghanistan ALP Afghan Local Police ALS Afghan logistic specialists AML/CFT anti-money-laundering/combating the financing of terrorism ANA Afghan National Army ANASOC ANA Special Command ANCOP Afghan National Civil Order Police ANDSF Afghan National Defense and Security Forces ANP Afghan National Police ANPA Afghan National Police Academy Continued on the next page

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ACRONYM OR ABBREVIATION DEFINITION ANPDF Afghanistan National Peace and Development Framework ANPH Afghan National Police Hospital ANPR Afghanistan National Peace and Reconciliation Strategy APFM Afghanistan Public Financial Management program APPS Afghan Personnel Pay System APRP Afghan Peace and Reintegration Plan ARP Afghans Read Program ARTF Afghanistan Reconstruction Trust Fund ASFF Afghanistan Security Forces Fund ASSF Afghan Special Security Forces ATAR Afghanistan Trade and Revenue Project ATFC Afghan Threat Finance Cell AUP Afghan Uniform Police AWDP Afghanistan Workforce Development Program BELT Basic Education, Literacy, and Technical-Vocational Education and Training BBG Broadcasting Board of Governors BPHS Basic Package of Health Services CBARD Community-Based Agricultre and Rural Development Project CBCMP Capacity Building and Change Management Program CBR Capacity Building for Results Program CCC Commodity Credit Corp CCCI Checchi and Company Consulting, Inc. CERP Commander’s Emergency Response Program CHAMP Commercial Horticulture and Agricultural Marketing Program CHO Complaints Handling Office CID MPFU U.S. Army Criminal Investigation Division Major Procurement Fraud Unit C-IED counter-improvised-explosive device CIGIE Council of the Inspectors General on Integrity and Efficiency CMR certified mission ready CN Counternarcotics CNCE Counter Narcotics Community Engagement CNPA Counternarcotics Police of Afghanistan COR Contracting Officer's Representatives CoreIMS Core Information Management System CPD Central Prison's Directorate CPMD Construction and Property Management Department CSH Child Survival and Health CSO civil-society organization Continued on the next page

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ACRONYM OR ABBREVIATION DEFINITION CSSP Corrections System Support Program CSTC-A Combined Security Transition Command-Afghanistan CTA Central Transfer Account CTFC Counter Threat Finance Cell DA Development Assistance DABS Da Afghanistan Breshna Sherkat DCA Development Credit Authority DCAR Delegated Cooperation Agreement DCIS Defense Criminal Investiagtive Service DEA Drug Enforcement Administration (U.S.) DEWS Plus Disease Early Warning System Plus DFAC dining facility DFID Department for International Development DHS Demographic and Health Survey DIG Deputy Inspector General DOD Department of Defense (U.S.) DOD CN Department of Defense Drug Interdiction and Counter-Drug Activities fund (U.S.) DOD IG Department of Defense Office of Inspector General DOJ Department of Justice (U.S.) DOM SEC Deputy, Deputy Minister for Security ECF Extended Credit Facility EF essential function EFT electronic funds-transfer EGR Early Grade Reading EGRC E-Government Resource Center EMIS Education Management Information System (Afghan) EPHS Essential Package of Hospital Services ERMA Emergency Refugee & Migration Assistance ESF Economic Support Fund EU European Union EXIM Export-Import Bank of the United States FAIDA Financial Access for Investing in the Development of Afghanistan FATF Financial Action Task Force FBI Federal Bureau of Investigation FinTRACA Afghanistan Financial Intelligence Unit FMF Foreign Military Financing FMS foreign military sales FOB Forward Operating Base Continued on the next page

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ACRONYM OR ABBREVIATION DEFINITION FY fiscal year GAO Government Accountability Office (U.S.) GCPSU General Command of Police Special Units GCPSU General Command of Police Special Unit GDP gross domestic product GDPDC General Directorate of Prisons and Detention Centers GEC Girls' Education Challenge Program GIROA Government of the Islamic Republic of Afghanistan GLE Governor-Led Eradication GOOD Gender Occupational Opportunity Development GPI Good Performer's Initiative GPS global positioning system GRAIN Grain Research and Innovation GS IG MOD General Staff Inspector General (Afghan) GSP Generalized System of Preferences GT ground training GVHR gross violations of human rights HEMAYAT Helping Mothers and Children Thrive HIG Hezb-e Islami Gulbuddin HOO High Office of Oversight for Anti-Corruption (aka "HOOAC") (Afghan) HOOAC High Office of Oversight for Anti-Corruption (Afghan) HPC High Peace Council HQ headquarters HSR Health Sector Resiliency HVAC heating, venting, and cooling ICRC International Committee of the Red Cross ID ANDSF Identification Card System IDA Disaster Assistance IEC Independent Election Commission (Afghan) IG inspector general IHSAN Initiative for Hygiene, Sanitation, and Nutrition ILNA institutional learning needs assessment IMET International Military Education and Training IMF International Monetary Fund INCLE International Narcotics Control and Law Enforcement (U.S) INL Bureau of International Narcotics and Law Enforcement Affairs (U.S.) IRD International Relief and Development Inc. IS-K Islamic State Khorasan Province Continued on the next page

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ACRONYM OR ABBREVIATION DEFINITION ISAF International Security Assistance Force ISR intelligence, surveillance, and reconnaissance IT information technology JA Judge Advocate's Office JRD Juvenile Rehabilitation Directorate JSSP Justice Sector Support Program (State) JTTP Justice Training Transition Program (State) KBR Kabul Bank Receivership Organization KFZ Kandahar Food Zone kg kilograms KIA killed-in-action KNMH Kabul National Military Hospital kWh kilowatt-hours LAO Local Area Orientation LARA Land Reform in Afghanistan LOTFA Law and Order Trust Fund for Afghanistan LTD loan-to-deposit ratio M&E Monitoring and Evaluation MAIL Ministry of Agriculture, Irrigation and Livestock (Afghan) MCIT Ministry of Communications and Information Technology (Afghan) MCN Ministry of Counter-Narcotics (Afghan) MCTF Major Crimes Task Force MEC Monitoring and Evaluation Committee (Afghan) MEW Ministry of Energy and Water (Afghan) MFNDU Marshal Fahim National Defense University MHM Mayer Hoffman McCann MIDAS Mining Investment and Development for Afghan Sustainability MLL MAERSK Limited Lines MOAB Massive Ordnance Air Blast MOCIT Ministry of Communications and Information Technology (Afghan) MOD Ministry of Defense (Afghan) MOE Minister of Education (Afghan) MOEc Ministry of Economy (Afghan) MOF Ministry of Finance (Afghan) MOHE Ministry of Higher Education (Afghan) MOI Ministry of Interior (Afghan) MOI HQ & IS Ministry of Interior Headquarters and Institutional Support (Afghan) MOJ Ministry of Justice (Afghan) Continued on the next page

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ACRONYM OR ABBREVIATION DEFINITION MOMP Ministry of Mines and Petroleum (Afghan) MOPH Ministry of Public Health (Afghan) MOPW Ministry of Public Works (Afghan) MPD Minitry of Interior and Police Development Project MRA Migration and Refugee Assistance MSH Management Sciences for Health MUDH Ministry of Urban Development and Housing MUNCH Mothers Under-Five Nutrition and Child Health Program NADR Non-Proliferation, Antiterrorism, Demining & Related NATO North Atlantic Treaty Organization NDAP National Drug Action Plan NEI Northern Electrical Interconnect NEPS Northeast Power System NGO nongovernmental organization NISTA Not In Service for Training NIU National Interdiction Unit NPA National Procurement Authority NPC National Procurement Commission NSOCC-A NATO Special Operations Component Command-Afghanistan O&M operations and maintenance OAP Open Access Policy OCIE organizational clothing and individual equipment OCHA Office for the Coordination of Humanitarian Affairs OECD Organization for Economic Cooperation and Development OFS Operation Freedom's Sentinel OHG Omran Holding Group OIG Office of the Inspector General OMB Office of Management and Budget (U.S.) OR operational readiness OTA Office of Technical Assistance (U.S. Treasury) OTSG Office of the Surgeon General PAI Personnel Asset Inventory PAS Public Affairs Section (U.S. Embassy Kabul) PEEL Program Evaluation for Effective Learning PKO Voluntary Peacekeeping POAM Program of Actions & Milestones POD proof of delivery PRD Population Registration Directorate Continued on the next page

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ACRONYM OR ABBREVIATION DEFINITION PTEC Power Transmission Expansion and Connectivity PTP People Technology and Processes LLC RA road authority RADP Regional Agriculture Development Program RC recurrent cost RF road fund RPSO Regional Procurement Support Office RS Resolute Support RSO Regional Support Officer RSSP Road Sector Sustainability Program S3 Strategic Sources Services SAAF Strengthening Afghan Agricultural Faculties SCIP Security Cooperation Information Portal SCSP Strategic Communication Support to the Palace SEA Strengthen Education in Afghanistan SEPS Southeast Power System SHAHAR Strong Hubs for Afghan Hope and Resilience SHOPS Plus Sustaining Health Outcomes through the Private Sector SIU Sensitive Investigation Unit SMAF Self-Reliance through Mutual Accountability Framework SMART specific, measurable, achievable, realistic, and time-bound SME subject matter expert SMW Special Mission Wing (Afghan) SOM Senior Officials Meeting SPFS Special Purpose Financial Statement SPM Support to Payroll Management SPS Strengthening Pharmaceutical Systems State OIG Department of State Office of the Inspector General SUPPORT Services Under Program Project Offices for Results Tracking SWIM Strengthening Watershed and Irrigation Management TAAC train, advise, and assist command TAC Transparency and Accountability Committees TAAC Train, Advise, Assist Command TA-MOPW Technical Assistance for the Ministry of Public Works Project TF task force TFBSO Task Force for Business and Stability Operations in Afghanistan TI Transition Initiatives TII transportation infrastructure institute Continued on the next page

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ACRONYM OR ABBREVIATION DEFINITION TIFA U.S.-Afghanistan Trade and Investment Framework Agreement TTHS Trainee, Transient, Holdee, and Students UAE United Arab Emirates UN United Nations UNAMA UN Assistance Mission in Afghanistan UNDP UN Development Programme UNHCR UN High Commissioner for Refugees UNICEF UN Children's Fund UNODC UN Office on Drugs and Crime USAAA U.S. Army Audit Agency USACE U.S. Army Corps of Engineers USACID U.S. Army Criminal Investigation Divison USAFOSI U.S. Air Force Office of Special Investigation USAID U.S. Agency for International Development USAID OIG USAID Office of the Inspector General USAO U.S. Attorney's Office USDA U.S. Department of Agriculture USFOR-A U.S. Forces-Afghanistan USTRANSCOM United States Transportation Command VEGA Volunteers for Economic Growth Alliance WIE Women in the Economy Project WIG Women in Government Program WLD Women's Leadership Development Program WPP Women's Participation Projects WTO World Trade Organization

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 243 ENDNOTES

1. General John Nicholson Jr., U.S. Army, before the U.S. Senate Contractual Obligations before Construction Was Completed Armed Services Committee, CQ Congressional Transcripts, and without Resolving Serious Health and Safety Hazards, 2/9/2017. SIGAR Inspection 13-9, 7/2013, [i]. 2. U.S. Department of State, “Foreign Terrorist Organizations,” list, 16. See the Counternarcotics sections of this and previous SIGAR https://www.state.gov/j/ct/rls/other/des/123085.htm, accessed quarterly reports. 4/9/2017; CBS News, “W.H.: ISIS a ‘terrorist group,’ but Taliban 17. GAO, Designing Evaluations, 2012 Revision, GAO-12-208G, an “armed insurgency,” 1/29/2015, http://www.cbsnews.com/ 1/2012, p. 3. news/white-house-isis-a-terrorist-group-but-taliban-an-armed- 18. IMF, “Islamic Republic of Afghanistan: Ex Post Assessment of insurgency/, accessed 4/14/2017. Longer-Term Program Engagement,” IMF Country Report 16/23, 3. Congressional Research Service (CRS), Afghanistan: Post- 2/2016, p. 1. Taliban Governance, Security, and U.S. Policy, Report 19. CRS, Does Foreign Aid Work? Efforts to Evaluate U.S. Foreign RL30588, 3/28/2017, p. 30. Assistance, CRS Report R42827, 6/23/2016, p. 3. 4. Radio Free Europe/Radio Liberty, “Official: Afghan Defense 20. Casey Dunning and Ben Leo, “Making USAID Fit for Ministry Fires 1,400 Staff Over Corruption,” 3/28/2017. Purpose—A Proposal for a Top-to-Bottom Program Review,” 5. For details on U.S., Afghan, and other casualties, see the secu- Center for Global Development, 2015, pp. 4, 7. rity section of SIGAR quarterly reports. 21. GAO, Foreign Assistance: Selected Agencies’ Monitoring and 6. Lt. Col. Patrick Clowney, USAF (Ret.), Jason Dever, and Evaluation Policies Generally Address Leading Practices, Steven Stuban, “Department of Defense Acquisition Program GAO-16-861R, 9/27/2016, p. 2. Terminations: Analysis of 11 Program Management Factors,” 22. CRS, Does Foreign Aid Work? Efforts to Evaluate U.S. Foreign Defense ARJ (Acquisition Research Journal), 7/2016, pp. 300, Assistance, CRS Report R42827, 6/23/2016, p. 16. 312–313. 23. SIGAR, Afghan National Security Forces: Additional Action 7. National Audit Office (UK),Guide: Initiating successful proj- Needed to Reduce Waste in $4.7 Billion Worth of Planned and ects, 12/1/2011, p. 5. Ongoing Construction Projects, SIGAR Audit 13-18, 9/2013, [iii]. 8. SIGAR, High-Risk List, 1/2017, p. 12. 24. GAO, Designing Evaluations, 2012 Revision, GAO-12-208G, 9. USAID, Retrospective Review of US Assistance to Afghanistan: 1/2012, p. 25. 1950–1979, consultant study by Devres Inc., Bethesda, MD, 25. Office of Management and Budget, Memorandum to the Heads USAID Contract FDC-0085-I-00-6095, 10/31/1988, p. 45. of Executive Departments and Agencies, “Use of Evidence and 10. USAID OIG, Audit of USAID/Afghanistan’s Rebuilding Evaluation in the 2014 Budget,” 5/18/2012, p. 2. Agricultural Markets Program, Audit Report No. 5-306-06-002-P, 26. The exchange of letters is posted at the SIGAR website 3/28/2006, pp. 1, 6. as “SIGAR Responds . . .,” https://www.sigar.mil/pdf/spot- 11. SIGAR, Afghanistan’s Road Infrastructure: Sustainment light/2013-07-03 Top 10 Response.pdf, 7/5/2013. Challenges and Lack of Repairs Put U.S. Investment at Risk, 27. CRS, Does Foreign Aid Work? Efforts to Evaluate U.S. Foreign SIGAR 17-11-AR, 10/2016, [iii], [iv]. Assistance, CRS Report R42827, 6/23/2016, p. 18. 12. SIGAR, Schools in Balkh Province: Observations from 28. Wall Street Journal, “Trump Seeks Major Cut to State Dept., Site Visits at 26 Schools, Office of Special Projects report USAID,” 3/16/2017. SIGAR-17-32-SP. 29. DOD, “Department of Defense Press Briefing by General 13. SIGAR, Schools in Balkh Province: Observations from Site Nicholson in the Pentagon Briefing Room,” 12/02/2016. Visits at 26 Schools, SIGAR-17-32SP, 3/2017, pp. 7-9, 11. In 30. Abraham Lincoln, speech at the Republican state convention, related news, Afghan Minister of Education Assadullah Hanif Springfield, Illinois, 6/18/1858. The full text is online, inter alia, Balkhi said in late 2016 that a study found only six million at the National Park Service website, https://www.nps.gov/liho/ Afghan children are at school, not the 11 million claimed by learn/historyculture/housedivided.htm. the previous government. See ToloNews, “Minister Sets Record 31. DOD, United States Department of Defense Fiscal Year Straight, Only Six Million In School,” http://www.tolonews. 2017 Budget Request: Request For Additional FY 2017 com, 12/19/2016; The Observed Student Percentage column Appropriations, 3/16/2017, pp. 8–9; DOD, Department of reflects the observed students as a portion of total attendance. Defense Budget Fiscal Year (FY) 2017; Justification for FY 2017 However, since SIGAR did not observe attendance across all Overseas Contingency Operations (OCO), OCO Amendment, shifts, we could not determine how the proportion of students Afghanistan Security Forces Fund (ASFF), 11/2016, p. 1. observed in one shift compares to other shifts at each school. 32. London Conference on Afghanistan, “Communiqué,” 1/28/2010. This figure represents the percentage of students observed on- 33. USAID/Afghanistan, “Mission Order 220.03,” 3/24/2015. site compared to the total adjusted number of students reported 34. Pub. L. No. 111-32, 6/24/2009. by school officials during the survey interview. 35. DOD, response to SIGAR vetting, 7/20/2009. 14. SIGAR, Statement of John F. Sopko, “Assessing the Capabilities 36. See Appendix B of this report. and Effectiveness of the Afghan National Defense and 37. DOD, United States Department of Defense Fiscal Year Security Forces,” Before the Subcommittee on Oversight and 2017 Budget Request: Request For Additional FY 2017 Investigations, Committee on Armed Services, U.S. House of Appropriations, 3/16/2017, pp. 8–9; DOD, Department of Representatives, 2/12/2016, p. 14. Defense Budget Fiscal Year (FY) 2017; Justification for FY 2017 15. SIGAR, Sheberghan Teacher Training Facility: U.S. Army Overseas Contingency Operations (OCO), OCO Amendment, Corps of Engineers Paid Contractors and Released Them from Afghanistan Security Forces Fund (ASFF), 11/2016, p. 1.

244 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ENDNOTES

38. DFAS, “AR(M) 1002 Appropriation Status by FY Program and 64. World Bank, ARTF: Administrator’s Report on Financial Subaccounts March 2017,” 4/15/2017. Status as of February 19, 2017 (end of 2nd month of FY 1396), 39. DOD OIG, Distribution of Funds and the Validity of Obligations p. 1. for the Management of the Afghanistan Security Forces Fund - 65. World Bank, ARTF: Administrator’s Report on Financial Phase I, Report No. D-2008-012, 11/5/2007, p. 2. Status as of February 19, 2017 (end of 2nd month of FY 1396), 40. Pub. L. No. 112-74, Section 9009 and Deputy Secretary of p. 4. Defense, Afghanistan Resources Oversight Council (AROC) 66. World Bank, Quarterly Country Update: Afghanistan, 4/2011, memorandum, 8/3/2011. p. 16. 41. DFAS, response to SIGAR data call, 10/19/2016; DFAS, “AR(M) 67. World Bank, ARTF: Administrator’s Report on Financial Status 1002 Appropriation Status by FY Program and Subaccounts as of February 19, 2017 (end of 2nd month of FY 1396), p. 8. March 2017,” 4/15/2017. 68. World Bank, Quarterly Country Update: Afghanistan, 4/2011, 42. DFAS, “AR(M) 1002 Appropriation Status by FY Program and p. 16. Subaccounts March 2017,” 4/15/2017. 69. World Bank, ARTF: Administrator’s Report on Financial 43. DOD, “Commanders’ Emergency Response Program (CERP),” Status as of February 19, 2017 (end of 2nd month of FY 1396), DOD Financial Management Regulation Vol. 12, Ch. 27, 1/2009, pp. 8–9. p. 27-3. 70. EC, “Afghanistan: State of Play, January 2011,” 3/31/2011, p. 7. 44. Pub. L. No. 113-235, 12/16/2014. 71. UNDP, response to SIGAR data call, 4/17/2017. 45. DOD, response to SIGAR data call, 4/13/2017. 72. UNDP, “Law and Order Trust Fund for Afghanistan (LOTFA) 46. DOD, response to SIGAR data call, 4/13/2017. Support to Payroll Management (SPM) and MOIA and Police 47. Pub. L. No. 112-74, Section 9009, 12/23/2011; Deputy Secretary Development (MPD) Projects 2016 Annual Progress Report, of Defense, “Afghanistan Resources Oversight Council (AROC) 4/16/2017, iii, p. 6; 1 July 2015–December 2016 (Phase VIII memorandum,” 8/3/2011; U.S. Senate Committee on Armed Project Document), 6/29/2015, ii, x, p. 34. Services, press release, “Senate Passes Ike Skelton National 73. UNDP, “Law and Order Trust Fund for Afghanistan [LOTFA] Defense Authorization Act for Fiscal Year 2011,” 12/22/2010. 1 July 2015–December 2016 (Phase VIII Project Document), 48. Pub. L. No. 112-74, Section 9009, 12/23/2011; Deputy Secretary 6/29/2015, ii, x, p. 54. of Defense, “Afghanistan Resources Oversight Council (AROC) 74. UNDP, “Law and Order Trust Fund for Afghanistan (LOTFA) memorandum,” 8/3/2011; U.S. Senate Committee on Armed Support to Payroll Management and MOIA and Police Services, press release, “Senate Passes Ike Skelton National Development Projects Annual Project Progress Report 2016 Defense Authorization Act for Fiscal Year 2011,” 12/22/2010. Annexes, 4/16/2017, pp. 4–5; UNDP, “Law and Order Trust Fund 49. See Appendix B of this report. for Afghanistan (LOTFA) Support to Payroll Management MOIA 50. DFAS, “AR(M) 1002 Appropriation Status by FY Program and and Police Development Projects: Phase One (July–December Subaccounts March 2017,” 4/15/2017; USAID, response to 2015) 2015 Annual Progress Report Annexes Financial Reports, SIGAR data call, 4/11/2017. Issue and Risk Frameworks,” 2/24/2016, pp. 4–5. 51. TFBSO, “About TFBSO,” accessed 10/20/2011; DOD, response 75. General John W. Nicholson, U.S. Army, Resolute Support and to SIGAR data call, 1/13/2015 and 7/22/2011. USFOR-A commander, Testimony Before the Senate Committee 52. DOD, response to SIGAR data call, 4/17/2017. on Armed Services, “The Situation in Afghanistan,” 2/9/2017. 53. DOD, “Drug Interdiction and Counter-Drug Activities, 76. UN, Report of the Secretary-General: The situation in Defense FY 2009 Supplemental Request Drug Interdiction and Afghanistan and its implications for international peace and Counterdrug Activities,” accessed 4/13/2010. security, 3/1/2017, pp. 4–5; USFOR-A, response to SIGAR data 54. DOD OIG, Independent Auditor’s Report on the DOD FY 2011 call, 3/1/2017 and 3/16/2016; DOD, response to SIGAR vetting, Detailed Accounting Report of the Funds Obligated for National 4/14/2017. Drug Control Program Activities, Report No. DODIG-2012-04, 77. USFOR-A, response to SIGAR data call, 2/20/2017. 1/30/2012. 78. General John W. Nicholson, U.S. Army, Resolute Support 55. DOD, response to SIGAR data call, 4/11/2017. and USFOR-A commander, Testimony Before the Senate 56. USAID, U.S. Foreign Assistance Reference Guide, 1/2005, p. 6. Committee on Armed Services, “The Situation in Afghanistan,” 57. USAID, response to SIGAR data call, 1/10/2017 and 10/19/2016; 2/9/2017; General Joseph L. Votel, U.S. Army, U.S. CENTCOM State, response to SIGAR data call, 5/4/2016, 4/15/2015, and Commander, Testimony Before the Senate Committee on 4/15/2014; DOD, response to SIGAR data call, 10/6/2014. Armed Services, “The Posture of U.S. Central Command,” 58. USAID, response to SIGAR data call, 4/11/2017 and 1/10/2017. 3/9/2017. 59. State, response to SIGAR data call, 10/13/2009. 79. General John W. Nicholson, U.S. Army, Resolute Support and 60. State, response to SIGAR data call, 1/6/2017. USFOR-A commander, Testimony Before the Senate Committee 61. State, response to SIGAR data call, 4/11/2017 and 1/6/2017. on Armed Services, “The Situation in Afghanistan,” 2/9/2017. 62. SIGAR, “Quarterly Report to the U.S. Congress,” 7/30/2010, 80. Lieutenant General John Goodman, USMC (ret.), SIGAR analy- p. 51. sis, 4/13/2017. 63. World Bank, ARTF: Administrator’s Report on Financial 81. General John W. Nicholson, U.S. Army, Resolute Support Status as of February 19, 2017 (end of 2nd month of FY 1396), and USFOR-A commander, Testimony Before the Senate p. 4. Committee on Armed Services, “The Situation in Afghanistan,” 2/9/2017; General Joseph L. Votel, U.S. Army, U.S. CENTCOM

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 245 ENDNOTES

Commander, Statement Before the Senate Committee on Armed 97. UNAMA, Afghanistan: Protection of Civilians in Armed Services, “The Posture of U.S. Central Command,” 3/9/2017. Conflict, Annual Report 2016, 2/7/2017, p. 3. 82. General John W. Nicholson, U.S. Army, Resolute Support and 98. UNAMA, Afghanistan: Protection of Civilians in Armed USFOR-A commander, Testimony Before the Senate Committee Conflict, Annual Report 2016, 2/7/2017, p. 6. on Armed Services, “The Situation in Afghanistan,” 2/9/2017; 99. UNAMA, “UNAMA Expresses Grave Concern at the High DOD, response to SIGAR vetting, 4/14/2017. Number of Recent Civilian Casualties in Helmand,” 2/12/2017. 83. General John W. Nicholson, U.S. Army, Resolute Support and 100. New York Times, “Afghan Officials Say at Least 50 Died in USFOR-A commander, Testimony Before the Senate Committee Attack on Hospital,” 3/15/2017. on Armed Services, “The Situation in Afghanistan,” 2/9/2017; 101. Tolo News, “Parliament To Impeach Security Ministers Over DOD, response to SIGAR vetting, 4/14/2017. Hospital Attack,” 3/15/2017; “Top Security Officials Survive 84. General Joseph L. Votel, U.S. Army, U.S. CENTCOM Impeachment by Wolesi Jirga,” 3/27/2017. Commander, Statement Before the Senate Committee on 102. Tolo News, “Hospital Attack: Inside help for Terrorists, MoD Armed Services, “The Posture of U.S. Central Command,” Admits,” 3/12/2017; Al Jazeera, “Investigation into ISIL claim of 3/9/2017; NSOCC-A, response to SIGAR vetting, 10/11/2016; Kabul hospital attack,” 3/9/2017. USFOR-A, response to SIGAR data call, 2/20/2017; DOD, 103. Al Jazeera, “Investigation into ISIL claim of Kabul hospital response to SIGAR vetting, 4/14/2017. attack,” 3/9/2017; General John W. Nicholson, U.S. Army, 85. USFOR-A, response to SIGAR data call, 1/20/2017, 11/26/2016, Resolute Support and USFOR-A commander, Testimony Before and 2/20/2017; SIGAR, analysis of USFOR-A provided ANDSF the Senate Committee on Armed Services, “The Situation in data, 3/2017; General John W. Nicholson, U.S. Army, Resolute Afghanistan,” 2/9/2017; NBC News, “Kabul Hospital Attack: ISIS Support and USFOR-A commander, Statement for the Record Claims Responsibility After 30 Killed by Gunmen Disguised as before the Senate Committee on Armed Services on the Doctors,” 3/8/2017; CNN, “Gunmen dressed as medical person- Situation in Afghanistan, 2/9/2017; Military.com, “Top Marine: nel attack Kabul hospital,” 3/8/2017. ‘No Delusions’ About Difficulty of Afghan Mission,” 1/12/2017. 104. Al Jazeera, “ICRC: Six Red Cross Aid Workers Killed in 86. UN, report of the Secretary-General, The situation in Afghanistan,” 2/8/2017; NPR, “Red Cross Says 6 Of Its Workers Afghanistan and its implications for international peace and Were Killed By Unknown Assailants In Afghanistan,” 2/8/2017. security, 3/1/2017, p. 4. 105. UNAMA, Afghanistan: Protection of Civilians in Armed 87. New York Times, “Taliban Take an Afghan District, Sangin, Conflict, Annual Report 2016, 2/7/2017, p. 27; Watchlist on That Many Marines Died to Keep,” 3/24/2017; General John W. Children and Armed Conflict, “Every Clinic is Now on the Nicholson, U.S. Army, Resolute Support and USFOR-A com- Frontline:” The Impact on Children of Attacks on Health Care in mander, Testimony Before the Senate Committee on Armed Afghanistan, 3/6/2017, pp. 4–5. Services, “The Situation in Afghanistan,” 2/9/2017. 106. UN, report of the Secretary-General, The situation in 88. UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and Afghanistan and its implications for international peace security, 3/1/2017, p. 4. and security, 3/1/2017, p. 5; USFOR-A, response to SIGAR vet- 107. UNAMA, Afghanistan: Protection of Civilians in Armed ting, 4/11/2017; Washington Post, “Pakistan shells border with Conflict, Annual Report 2016, 2/7/2017, p. 27. Afghanistan as tensions rise over terrorist attacks,” 2/21/2017. 108. UNAMA, “UNAMA Condemns Attack Outside Supreme Court 89. CNN, “‘Mother of all bombs’ killed 94 ISIS fighters, Afghan offi- in Kabul,” 2/8/2017; Reuters, “Islamic State claims responsibility cial says,” 4/15/2017; New York Times, “U.S. Drops ‘Mother of for Afghan Supreme Court attack,” 2/8/2017. All Bombs’ on ISIS Caves in Afghanistan,” 4/13/2017. 109. New York Times, “2 Taliban Bombings Kill 23 People in Kabul,” 90. UN, report of the Secretary-General, The situation in 3/1/2017; Tolo News, “Gov’t Probes Reports Taliban Used Afghanistan and its implications for international peace and Chemicals In PD6 Attack,” 3/5/2017. security, 3/1/2017, p. 4. 110. See Appendix B of this report. 91. UN, report of the Secretary-General, The situation in 111. OSD-P, email to SIGAR, 1/13/2017. Afghanistan and its implications for international peace and 112. See Appendix B of this report. security, 3/1/2017, p. 5. 113. USFOR-A, response to SIGAR data call, 3/01/2017. 92. Khaama Press, “Key Taliban group leader Abdul Wali killed in 114. USFOR-A, response to SIGAR data call, 3/01/2017 and Laghman province,” 3/13/2017; Tolo News, “Baghlan’s Tala Wa 11/26/2016; SIGAR, analysis of USFOR-A provided data, 4/2017. Barfak Fall to Taliban,” 3/1/2017; Tolo News, “Security Forces 115. USFOR-A, response to SIGAR data call, 11/26/2016. Retake Tala Wa Barfak District,” 3/3/2017. 116. USFOR-A, response to SIGAR data call, 3/01/2017, 11/26/2016, 93. Resolute Support, “USFOR-A confirms air strike killing Mullah and 5/28/2016, and response to SIGAR vetting, 10/11/2016. Salam, four others,” 2/28/2017. 117. USFOR-A, response to SIGAR data call, 3/01/2017, 11/26/2016, 94. New York Times, “In Taliban Attacks, a Reminder That Winter and 2/27/2016; SIGAR, analysis of USFOR-A provided data, Offers Afghans No Mercy,” 2/28/2017. 4/2017. 95. Defense.gov, “U.S. Strike Kills High-Profile Terrorist Leader,” 118. USFOR-A, response to SIGAR data call, 3/01/2017 and 3/25/2017. 11/26/2016. 96. UN, report of the Secretary-General, The situation in 119. USFOR-A, response to SIGAR data call, 3/01/2017 and Afghanistan and its implications for international peace and 11/26/2016; USFOR-A, response to SIGAR vetting, 4/11/2017. security, 3/1/2017, pp. 4–5. 120. USFOR-A, response to SIGAR data call, 2/27/2016.

246 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ENDNOTES

121. USFOR-A, response to SIGAR data call, 3/01/2017 and Taliban Attacks, a Reminder That Winter Offers Afghans No 11/26/2016. Mercy,” 2/28/2017. 122. DOD, response to SIGAR data call, 3/31/2017. 152. DOD, “Media Availability with Gen. Campbell in Bagram, 123. DOD, response to SIGAR data call, 3/31/2017. Afghanistan,” 12/18/2015. 124. DOD, response to SIGAR data call, 3/30/2017. 153. Associated Press, “US General: Afghan Army Being ‘Rebuilt’ 125. Resolute Support, “U.S. casualty in Nangarhar province,” For Taliban Battle,” 1/25/2016; DOD, “Department of Defense 4/9/2017. Press Briefing by Brig. Gen. Cleveland via Teleconference from 126. DOD, response to SIGAR data call, 3/1/2017. Afghanistan,” 6/1/2016; TF Forge, response to SIGAR vetting, 127. Military Times, “Pentagon: No Life-threatening Injuries for 4/11/2017. Troops Wounded in Apparent Insider Attack,” 3/20/2017; 154. Reuters, “Confusion, Corruption Among Afghan Forces Hit Al-Jazeera, “American Soldiers Wounded in an ‘Insider Attack’,” Helmand Defense,” 12/25/2015. 3/19/2017. 155. DOD, “Department of Defense Press Briefing by Gen. Shoffner 128. DOD, response to SIGAR data call, 3/1/2017. via Teleconference from Afghanistan,” 1/19/2016. 129. DOD, response to SIGAR data call, 3/1/2017. 156. New York Times, “Afghan General Tasked With Cutting 130. CSTC-A, response to SIGAR data call, 3/1/2017. Corruption is Now Accused of It,” 3/28/2017; DOD, “Department 131. CSTC-A, response to SIGAR data call, 3/1/2017. of Defense Press Briefing by Brig. Gen. Cleveland via 132. CSTC-A, response to SIGAR data call, 3/1/2017. Teleconference from Afghanistan,” 10/21/2016. 133. CSTC-A, response to SIGAR data call, 3/8/2017. 157. New York Times, “Where Afghan War Was Transferred Long 134. CSTC-A, response to SIGAR data call, 3/1/2017. Ago,” 12/28/2017; DOD, “Department of Defense Press Briefing 135. USFOR-A, response to SIGAR data call, 2/25/2017 and 3/4/2017. by Brig. Gen. Cleveland via Teleconference from Afghanistan.” 136. USFOR-A, response to SIGAR data call, 3/1/2017. 158. Reuters, “Afghan Troops Blunt Taliban Offensive Outside 137. USFOR-A, response to SIGAR data call, 2/26/2017; USFOR-A, Helmand Capital, Officials Say,” 10/17/2016. response to SIGAR vetting, 4/11/2017. 159. DOD, “Department of Defense Press Briefing by Brig. Gen. 138. RS, response to SIGAR data call, 3/1/2017. Cleveland via Teleconference from Kabul, Afghanistan,” 139. DOD, “Afghan Forces Make Progress, Yet Challenges Remain, 10/21/2016. Official Says,” Defense Media Activity, 10/21/2016. 160. Long War Journal, “Helmand Capital ‘Practically Besieged 140. Testimony of General John W. Nicholson, USA, Commander by the Taliban,” 8/9/2016; CBS News, “Backup sent amid fears Resolute Support and U.S. Forces-Afghanistan , before Taliban could seize city within days,” 8/10/2016. the Senate Armed Services Committee, on the Situation in 161. DOD, “Department of Defense Press Briefing by Brig. Gen. Afghanistan, 2/9/2017, p. 34. Cleveland via Teleconference from Afghanistan,” 8/25/2016. 141. DOD, “Department of Defense Press Briefing by Gen. Shoffner 162. Statement of General John W. Nicholson, USA, Commander via Teleconference from Afghanistan,” 1/19/2016. Resolute Support and U.S. Forces-Afghanistan , before 142. ISW, Counterinsurgency in Helmand, Afghanistan Report 8, the Senate Armed Services Committee, on the Situation in 1/2011, p. 10. Afghanistan, 2/9/2017, p. 8. 143. DLA, “Afghan Disposition Mission,” 11/01/2016. 163. DOD, “Department of Defense Press Briefing by Brig. Gen. 144. DOD, “Department of Defense Press Briefing by Brig. Gen. Cleveland via teleconference from Kabul, Afghanistan,” Cleveland via Teleconference from Afghanistan,” 8/25/2016. 10/21/2016; Reuters, “Taliban Fighters ambush, Kill Dozens of 145. ISW, Securing Helmand, Afghanistan Report 2, 9/2009, p. 33; Retreating Afghan Troops,” 10/13/2016. ISW, Counterinsurgency in Helmand, Afghanistan Report 8, 164. Reuters, “Afghan Troops Blunt Taliban Offensive Outside 1/2011, p. 11. Helmand Capital, Officials Say,” 10/17/2016. 146. ISW, Securing Helmand, Afghanistan Report 2, 9/2009, pp. 42–43. 165. DOD, Enhancing Security and Stability in Afghanistan, 147. Washington Post, “U.S. Deploying Heavily Armored Battle 12/2016, p. 36. Tanks for First Time in Afghan War,” 11/19/2010; ISW, 166. Long War Journal, “Resolute Support Spins Loss of Sangin Counterinsurgency in Helmand, Afghanistan Report 8, District Center as a Victory,” 3/23/2017; New York Times, 1/2011, pp. 21–22. “Taliban Take an Afghan District, Sangin, That Many Marines 148. DOD, “Remarks by Secretary Gates to Service Members in Died to Keep,” 3/23/2017; IHS Jane’s, “Taliban Seize Centre of Sangin, Afghanistan,” 3/8/2011. Sangin District in Southern Afghanistan,” 3/24/2017. 149. San Diego Union Tribune, “Marine general: time was right to 167. Long War Journal, “Resolute Support Spins Loss of Sangin leave Helmand, Afghanistan, despite violence,” 1/21/2015; “What District Center as a Victory,” 3/23/2017; New York Times, Marines did in Helmand Province,” 11/8/2014. “Taliban Take an Afghan District, Sangin, That Many Marines 150. ISW, Coalition Combat and Forces in Afghanistan: Died to Keep,” 3/23/2017; IHS Jane’s, “Taliban Seize Centre of Afghanistan Order of Battle, 7/1/2016, p. 3; Washington Post, Sangin District in Southern Afghanistan,” 3/24/2017. “‘Band-Aid on a bullet wound’: What America’s new war looks 168. TF Forge, response to SIGAR vetting, 4/12/2017. like in Afghanistan’s most violent province”, 10/16/2016; Task 169. DOD, “Department of Defense Press Briefing by General Force Forge, response to SIGAR vetting, 4/12/2017. Nicholson in the Pentagon Briefing Room, 12/2/2016; UN, report 151. Radio Free Europe/Radio Liberty, “The Taliban’s Rare Winter of the Secretary-General, The situation in Afghanistan and its Offensive in Afghanistan,” 1/8/2017; New York Times, “In implications for international peace and security, 3/1/2017, p. 4. 170. CSTC-A, response to SIGAR data call, 1/20/2017.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 247 ENDNOTES

171. NATO, Resolute Support, “Afghan Forces Prepare for Spring 200. Khaama Press, “Ex-Afghan spy chief Saleh appointed as minis- Campaign,” 2/5/2017. ter for security reforms,” 3/11/2017. 172. TF Forge, response to SIGAR vetting, 4/12/2017. 201. New York Times, “Afghan General Tasked With Cutting 173. USFOR-A, response to SIGAR data call, 3/1/2017. Corruption Is Now Accused of It,” 3/28/2017. 174. USFOR-A, response to SIGAR data call, 3/1/2017; DOD, 202. This figure now reflects SIGAR’s first-time inclusion of 4,940 Enhancing Security and Stability in Afghanistan, 12/2016, p. ANP personnel considered active but temporarily not in service 44; TF Forge, response to SIGAR vetting, 4/11/2017. for training (NISTA). USFOR-A, response to SIGAR data call, 175. DOD, Enhancing Security and Stability in Afghanistan, 1/20/2017; SIGAR, analysis of USFOR-A provided ANDSF data, 12/2016, p. 31; USFOR-A, response to SIGAR data call, 6/9/2016. 3/2017. 176. TF Forge, response to SIGAR data call, 6/9/2016. 203. The ANP assigned strength’s percentage of its authorized 177. DOD, Enhancing Security and Stability in Afghanistan, strength includes NISTA personnel. The ANP’s percentage of 12/2015, p. 30; Reuters, “Afghan Troops Blunt Taliban Offensive growth since last quarter, with or without NISTA, is roughly Outside Helmand Capital, Officials Say,” 10/17/2016. 1%. USFOR-A, response to SIGAR data call, 1/20/2017 and 178. Testimony of General John W. Nicholson, USA, Commander 11/26/2016; SIGAR, analysis of USFOR-A provided ANDSF data, Resolute Support and U.S. Forces-Afghanistan, before the 3/2017. Senate Armed Services Committee, on the Situation in 204. Both this quarter and last quarter’s figures were adjusted to Afghanistan, 2/9/2017, p. 3; Resolute Support, “Afghan Forces include the ANP NISTA for comparison. The latter figure does Prepare for Spring Campaign,” 2/5/2017. not include the ANP NISTA in order to make an accurate com- 179. USFOR-A, response to SIGAR data call, 2/20/2017. parison to last year’s strength figure, which did not have NISTA 180. General John W. Nicholson, U.S. Army, Resolute Support and numbers. USFOR-A, response to SIGAR data call, 1/20/2017 and USFOR-A commander, Testimony Before the Senate Committee 11/26/2016; SIGAR, analysis of USFOR-A provided ANDSF data, on Armed Services, “The Situation in Afghanistan;” Statement 3/2017. for the Record before the Senate Committee on Armed Services 205. Last quarter’s figure for the ANP now includes NISTA to make on the Situation in Afghanistan, 2/9/2017; DOD, response to an accurate comparison to this quarter. USFOR-A, response to SIGAR vetting, 4/14/2017. SIGAR data call, 1/20/2017 and 11/26/2016; SIGAR, analysis of 181. USFOR-A, response to SIGAR data call, 2/20/2017; USFOR-A, USFOR-A provided ANDSF data, 3/2017. response to SIGAR vetting, 4/11/2017. 206. USFOR-A, response to SIGAR data call, 3/1/2017. 182. USFOR-A, response to SIGAR data call, 2/20/2017. 207. USFOR-A, response to SIGAR data call, 3/16/2016. 183. General John W. Nicholson, U.S. Army, Resolute Support and 208. DOD, Enhancing Security and Stability in Afghanistan, USFOR-A commander, Testimony Before the Senate Committee 12/2016, p. 26. on Armed Services, “The Situation in Afghanistan,” 2/9/2017. 209. DOD, response to SIGAR data call, 3/1/2017. 184. NSOCC-A, response to SIGAR vetting, 10/11/2016. 210. USFOR-A, response to SIGAR data call, 3/4/2016; USFOR-A, 185. USFOR-A, response to SIGAR data call, 2/20/2017; response to response to SIGAR vetting, 10/11/2016. SIGAR vetting, 4/11/2017. 211. USFOR-A, response to SIGAR data call, 5/25/2016; RS, email 186. USFOR-A, response to SIGAR data call, 2/20/2017; DOD, to SIGAR, 12/27/2016; CSTC-A, response to SIGAR vetting, response to SIGAR vetting, 4/14/2017. 4/11/2017. 187. USFOR-A, response to SIGAR data call, 2/20/2017. 212. USFOR-A, response to SIGAR data call, 11/26/2016. 188. USFOR-A, response to SIGAR data call, 2/20/2017. 213. USFOR-A, response to SIGAR vetting, 7/15/2016. 189. USFOR-A, response to SIGAR data call, 3/10/2016. 214. CSTC-A, response to SIGAR vetting, 4/11/2017. 190. USFOR-A, response to SIGAR data call, 5/25/2016. 215. USFOR-A, response to SIGAR data call, 3/8/2017, 1/20/2017, and 191. USFOR-A, response to SIGAR data call, 5/25/2016. 3/3/2017. 192. USFOR-A, response to SIGAR data call, 12/28/2014. 216. USFOR-A, response to SIGAR vetting, 4/11/2017. 193. USFOR-A, response to SIGAR data call, 2/23/2017. 217. RS, email to SIGAR, 12/27/2016; WSJ, “U.S. Military Moves to 194. USFOR-A, response to SIGAR data call, 2/23/2017. Clear ‘Ghost Soldiers’ From Afghan Payroll,” 1/19/2017. 195. USFOR-A, response to SIGAR data call, 2/23/2017. 218. USFOR-A, response to SIGAR data call, 3/1/2017; USFOR-A, 196. USFOR-A, response to SIGAR data call, 2/23/2017. response to SIGAR vetting, 4/11/2017. 197. USFOR-A, response to SIGAR data call, 2/23/2017. 219. USFOR-A, response to SIGAR vetting, 4/14/2017. 198. General John W. Nicholson, U.S. Army, Resolute Support 220. USFOR-A, response to SIGAR data call, 3/1/2017. and USFOR-A commander, Testimony Before the Senate 221. USFOR-A, response to SIGAR data call, 3/1/2017. Committee on Armed Services, “The Situation in Afghanistan,” 222. USFOR-A, response to SIGAR data call, 3/8/2017. 2/9/2017; General Joseph L. Votel, U.S. Army, U.S. CENTCOM 223. USIP, Special Report 322, Police Transition in Afghanistan, Commander, Statement Before the Senate Committee on 2/2013; NSOCC-A, response to SIGAR data call, 11/27/2015. Armed Services, “The Posture of U.S. Central Command,” 224. CSTC-A, response to SIGAR data call, 8/27/2016; DOD response 3/9/2017. to SIGAR vetting, 10/9/2016. 199. Stars and Stripes, “Afghans reshuffle military leadership to 225. DOD, Enhancing Security and Stability in Afghanistan, thwart Taliban gains,” 2/27/2017; One TV News, Afghanistan, 12/2016, p. 33; USFOR-A, response to SIGAR data call, “Deputy Interior Minister for security dismissed from duty, MoI 1/20/2017; SIGAR, analysis of USFOR-A provided ANDSF data, confirmed,” 3/15/2017. 3/2017.

248 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ENDNOTES

226. NSOCC-A, response to SIGAR data call, 3/3/2017. 261. CSTC-A, response to SIGAR data call, 2/27/2017 and 11/20/2016; 227. NSOCC-A, response to SIGAR data call, 3/3/2017 and 11/28/2016; SIGAR, analysis of CSTC-A provided data, 3/2017. SIGAR, analysis of NSOCC-A provided data, 4/2017. 262. CSTC-A, response to SIGAR vetting, 4/11/2017. 228. NSOCC-A, response to SIGAR data call, 3/3/2017. 263. CSTC-A, response to SIGAR data call, 2/27/2017 and 11/20/2016; 229. NSOCC-A, response to SIGAR data call, 8/30/2016; OSD-P, SIGAR, analysis of CSTC-A provided data, 3/2017. response to SIGAR vetting, 7/15/2016. 264. CSTC-A, response to SIGAR data call, 2/27/2017 and 11/20/2016; 230. NSOCC-A, response to SIGAR data call, 3/3/2017. SIGAR, analysis of CSTC-A provided data, 3/2017. 231. NSOCC-A, response to SIGAR data call, 11/28/2016; NSOCC-A, 265. CSTC-A, response to SIGAR data call, 1/20/2017 and 10/31/2016. response to SIGAR vetting, 4/11/2017. 266. CSTC-A, response to SIGAR data call, 10/31/2016. 232. NSOCC-A, response to SIGAR data call, 11/28/2016. 267. CSTC-A, response to SIGAR data call, 1/20/2017. 233. NSOCC-A, response to SIGAR data call, 3/3/2017 and 11/28/2016. 268. CSTC-A, response to SIGAR data call, 1/20/2017 and 10/31/2016. 234. CSTC-A, MOI FY 1395 Financial Commitment Letter, 269. CSTC-A, response to SIGAR data call, 1/20/2017; DOD, 12/28/2015. Enhancing Security and Stability in Afghanistan, 12/2016, 235. NSOCC-A, response to SIGAR data call, 3/3/2017. p. 52. 236. NSOCC-A, response to SIGAR vetting, 4/12/2017. 270. CSTC-A, response to SIGAR data call, 1/20/2017; DOD, 237. NSOCC-A, response to SIGAR data call, 3/3/2017. Enhancing Security and Stability in Afghanistan, 12/2016, 238. NSOCC-A, response to SIGAR data call, 3/3/2017. p. 52. 239. DFAS, “AR(M) 1002 Appropriation Status by FY Program and 271. CSTC-A, response to SIGAR data call, 1/20/2017; DOD, Subaccounts March 2017,” 4/15/2017. Enhancing Security and Stability in Afghanistan, 12/2016, 240. USFOR-A, response to SIGAR data call, 1/20/2017. p. 52. 241. USFOR-A, response to SIGAR data call, 1/20/2017, 11/26/2016, 272. CSTC-A, response to SIGAR data call, 1/20/2017. and 1/20/2016; SIGAR, analysis of USFOR-A provided ANDSF 273. CSTC-A, response to SIGAR data call, 1/20/2017. data, 3/2017. 274. CSTC-A, response to SIGAR data call, 3/8/2016 and 8/31/2016; 242. USFOR-A, response to SIGAR data call, 1/20/2017 and OSD-P, response to SIGAR vetting, 4/15/2016. 11/26/2016; SIGAR, analysis of USFOR-A provided ANDSF data, 275. CSTC-A, response to SIGAR data call, 5/25/2016; OSD-P and 3/2017. USFOR-A, response to SIGAR vetting, 7/15/2016; DOD, response 243. USFOR-A, response to SIGAR vetting, 4/11/2017. to SIGAR vetting, 1/12/2017. 244. USFOR-A, response to SIGAR data call, 1/20/2017 and 276. OSD-P, response to SIGAR vetting, 4/15/2016. 11/26/2016; SIGAR, analysis of USFOR-A provided ANDSF data, 277. CSTC-A, response to SIGAR data call, 11/21/2016; DOD, 3/2017. response to SIGAR vetting, 1/12/2017. 245. USFOR-A, response to SIGAR data call, 1/20/2017 and 278. CSTC-A, response to SIGAR data call, 3/1/2017. 11/26/2016; SIGAR, analysis of USFOR-A provided ANDSF data, 279. CSTC-A, response to SIGAR data call, 11/21/2016; OSD-P, 3/2017. response to SIGAR vetting, 7/15/2016. 246. DOD, response to SIGAR vetting, 1/12/2017. 280. CSTC-A, response to SIGAR data call, 5/25/2016 and 8/31/2016; 247. DOD, Enhancing Security and Stability in Afghanistan, OSD-P, response to SIGAR vetting, 7/15/2016. 12/2016, p. 34. 281. CSTC-A, response to SIGAR data call, 11/21/2016 and 5/25/2016. 248. DOD, Enhancing Security and Stability in Afghanistan, 282. CSTC-A, response to SIGAR data call, 11/21/2016. 12/2016, p. 34. 283. CSTC-A, response to SIGAR data call, 3/1/2017. 249. DFAS, “AR(M) 1002 Appropriation Status by FY Program and 284. CSTC-A, response to SIGAR data call, 3/1/2017. Subaccounts March 2017,” 4/15/2017. 285. DFAS, “AR(M) 1002 Appropriation Status by FY Program and 250. CSTC-A, response to SIGAR data call, 12/4/2015 and 11/20/2016. Subaccounts March 2017,” 4/15/2017. 251. CSTC-A, response to SIGAR data call, 12/20/2016 and 286. CSTC-A, response to SIGAR data call, 2/28/2017. 12/22/2015. 287. CSTC-A, response to SIGAR data call, 2/28/2017. 252. CSTC-A, response to SIGAR data call, 12/20/2016; CSTC-A, 288. CSTC-A, response to SIGAR data call, 2/28/2017 and 11/20/2016. response to SIGAR vetting, 4/11/2017. 289. CSTC-A, response to SIGAR data call, 2/28/2017; CSTC-A, 253. CSTC-A, response to SIGAR data call, 12/20/2016. response to SIGAR vetting, 4/11/2017. 254. OSD-P, response to SIGAR vetting, 7/15/2016 and 10/11/2016. 290. CSTC-A, response to SIGAR data call, 2/28/2017. 255. CSTC-A, response to SIGAR data call, 12/20/2016. 291. CSTC-A, response to SIGAR data call, 2/28/2017. 256. CSTC-A, response to SIGAR data call, 12/20/2016 and 292. CSTC-A, response to SIGAR data call, 2/28/2017. 12/22/2015. 293. DFAS, “AR(M) 1002 Appropriation Status by FY Program and 257. DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts March 2017,” 4/15/2017. Subaccounts March 2017,” 4/15/2017. 294. CSTC-A, response to SIGAR data call, 3/1/2017; CSTC-A, 258. CSTC-A, response to SIGAR data call, 2/27/2017. response to SIGAR vetting, 4/11/2017. 259. CSTC-A, response to SIGAR data call, 2/27/2017; SIGAR, analy- 295. USFOR-A, response to SIGAR data call, 1/20/2017, 11/20/2016, sis of CSTC-A provided data, 3/2017. and 1/20/2016. 260. CSTC-A, response to SIGAR data call, 2/27/2017, 11/20/2016, and 296. Note: This figure does not include funding for the Special 2/29/2016; SIGAR, analysis of CSTC-A provided data, 3/2017. Mission Wing. CSTC-A, response to SIGAR data call, 2/28/2017; SIGAR, analysis of CSTC-A provided data, 4/2017.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 249 ENDNOTES

297. General John Nicholson, Department of Defense, Press Briefing 323. Both this quarter and last quarter’s figures were adjusted to in the Pentagon Briefing Room, 12/2/2016; CSTC-A, response to include the ANP NISTA for accurate comparison. USFOR-A, SIGAR data call, 2/28/2017; DOD, response to SIGAR vetting, response to SIGAR data call, 1/20/2017 and 11/26/2016; SIGAR, 4/14/2017. analysis of USFOR-A provided data, 4/2017. 298. CSTC-A, response to SIGAR data call, 2/28/2017; SIGAR, analy- 324. Both this quarter and June 2016’s figures were adjusted to sis of CSTC-A provided data, 4/2017. include the ANP NISTA for accurate comparison. USFOR-A, 299. Note: This figure does not include funding for the Special response to SIGAR data call, 1/20/2017 and 6/30/2016; SIGAR, Mission Wing. CSTC-A, response to SIGAR data call, 2/28/2017; analysis of USFOR-A provided data, 4/2017. SIGAR, analysis of CSTC-A provided data, 4/2017. 325. USFOR-A, response to SIGAR data call, 1/20/2017. 300. CSTC-A, response to SIGAR data call, 2/28/2017; SIGAR, analy- 326. USFOR-A, response to SIGAR data call, 4/5/2017. sis of CSTC-A provided data, 4/2017. 327. DFAS, “AR(M) 1002 Appropriation Status by FY Program and 301. USFOR-A, response to SIGAR data call, 3/3/2017; USFOR-A, Subaccounts March 2017,” 4/15/2017. response to SIGAR vetting, 4/11/2017. 328. CSTC-A, response to SIGAR data call, 1/25/2017. 302. USFOR-A, response to SIGAR vetting, 4/11/2017. 329. CSTC-A, response to SIGAR data call, 8/31/2016. 303. DOD, response to SIGAR vetting, 4/14/2017. 330. CSTC-A, response to SIGAR data call, 1/25/2017. 304. USFOR-A, response to SIGAR data call, 6/6/2016. 331. CSTC-A, response to SIGAR data call, 1/25/2017; CSTC-A 305. USFOR-A, response to SIGAR data call, 3/3/2017; USFOR-A, response to SIGAR vetting, 4/11/2017. response to SIGAR vetting, 4/11/2017. 332. CSTC-A, response to SIGAR data call, 1/25/2017 and 11/20/2016. 306. General John Nicholson, Department of Defense, Press Briefing 333. CSTC-A, response to SIGAR data call, 1/25/2017. in the Pentagon Briefing Room, 12/2/2016. 334. DFAS, “AR(M) 1002 Appropriation Status by FY Program and 307. General John W. Nicholson, U.S. Army, Resolute Support and Subaccounts March 2017,” 4/15/2017. USFOR-A commander, Testimony Before the Senate Committee 335. CSTC-A, response to SIGAR data call, 2/27/2017; SIGAR, analy- on Armed Services, “The Situation in Afghanistan,” 2/9/2017. sis of CSTC-A provided data, 4/2017. 308. USFOR-A, response to SIGAR data call, 3/3/2017; SIGAR, analy- 336. CSTC-A, response to SIGAR data call, 2/27/2017 and 11/20/2016; sis of USFOR-A provided data, 4/2017. SIGAR, analysis of CSTC-A provided data, 4/2017. 309. USFOR-A, response to SIGAR data call, 3/3/2017; SIGAR, analy- 337. RAND, Advising the Command: Best Practices from the sis of USFOR-A provided data, 4/2017. Special Operations Advisory Experience in Afghanistan, 2015, 310. USFOR-A, response to SIGAR vetting, 4/11/2017. p. 2; DOD, Enhancing Security and Stability in Afghanistan, 311. USFOR-A, response to SIGAR data call, 3/3/2017; SIGAR, analy- 12/2016 p. 85; CSTC-A, MOI FY 1395 Financial Commitment sis of USFOR-A provided data, 4/2017. Letter, 12/28/2015; NSOCC-A, response to SIGAR data call, 312. General John W. Nicholson, U.S. Army, Resolute Support and 11/28/2016. USFOR-A commander, Statement for the Record before the 338. NSOCC-A, response to SIGAR data call, 3/3/2017. Senate Committee on Armed Services on the Situation in 339. DFAS, “AR(M) 1002 Appropriation Status by FY Program and Afghanistan, 2/9/2017; General Joseph L. Votel, U.S. Army, Subaccounts March 2017,” 4/15/2017. U.S. CENTCOM commander, Statement Before the Senate 340. CSTC-A, response to SIGAR data call, 3/3/2017. Committee on Armed Services, “The Posture of U.S. Central 341. CSTC-A, response to SIGAR data call, 3/3/2017. Command,” 3/9/2017; DOD, response to SIGAR vetting, 342. CSTC-A, response to SIGAR data call, 3/3/2017. 4/14/2017. 343. CSTC-A, response to SIGAR data call, 3/3/2017. 313. USFOR-A, response to SIGAR data call, 3/3/2017; USFOR-A, 344. CSTC-A, response to SIGAR data call, 3/3/2017. response to SIGAR vetting, 4/11/2017. 345. CSTC-A, response to SIGAR data call, 3/3/2017. 314. DOD, response to SIGAR vetting, 4/14/2017. 346. DFAS, “AR(M) 1002 Appropriation Status by FY Program and 315. DOD, response to SIGAR vetting, 4/14/2017. Subaccounts March 2017,” 4/15/2017. 316. DOD, Enhancing Security and Stability in Afghanistan, 347. CSTC-A, response to SIGAR data call, 3/8/2017; CSTC-A, MOI 12/2016, p. 65. FY 1395 Financial Commitment Letter, 12/28/2015. 317. General John Nicholson, Department of Defense, Press Briefing 348. CSTC-A, response to SIGAR data call, 12/29/2016; OSD-P, in the Pentagon Briefing Room, 12/2/2016. response to SIGAR data call, 12/28/2016. 318. USFOR-A, response to SIGAR data call, 3/3/2017; DOD, 349. CSTC-A, response to SIGAR data call, 3/3/2017. response to SIGAR vetting, 4/14/2017. 350. CSTC-A, response to SIGAR data call, 3/3/2017. 319. USFOR-A, response to SIGAR data call, 3/3/2017; SIGAR, analy- 351. CSTC-A, response to SIGAR data call, 3/3/2017. sis of USFOR-A provided data, 4/2017; DOD, response to SIGAR 352. USFOR-A, response to SIGAR data call, 3/1/2017 and 11/19/2016; vetting, 4/14/2017. SIGAR analysis of USFOR-A provided data. 320. USFOR-A, response to SIGAR data call, 3/3/2017. 353. USFOR-A, response to SIGAR data call, 3/1/2017. 321. DFAS, “AR(M) 1002 Appropriation Status by FY Program and 354. USFOR-A, response to SIGAR data call, 3/1/2017; SIGAR, analy- Subaccounts March 2017,” 4/15/2017. sis of USFOR-A provided data, 4/2017. 322. This figure now reflects SIGAR’s first-time inclusion of 4,940 355. USFOR-A, response to SIGAR data call, 3/1/2017. ANP personnel considered active but temporarily not in service 356. USFOR-A, response to SIGAR data call, 3/1/2017. for training (NISTA). USFOR-A, response to SIGAR data call, 1/20/2017.

250 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ENDNOTES

357. DVIDS, “Shaheen WPP facility sets stage for more women 386. ToloNews, “Rabbani Call For Change In Government System,” in ANDSF,” 3/9/2017; CSTC-A, response to SIGAR data call, 2/22/2017. 3/1/2017. 387. Afghanistan Analysts Network, “The ‘government of national 358. RS, response to SIGAR data call, 3/1/2017. unity’ deal (full text),” 9/21/2014. 359. CSTC-A, response to SIGAR data call, 2/28/2017. 388. USAID, ODG, response to SIGAR vetting, 4/13/2016. 360. CSTC-A, response to SIGAR data call, 2/28/2017; SIGAR, analy- 389. GIROA, Self-Reliance through Mutual Accountability sis of CSTC-A provided data, 4/2017. Framework (SMAF), 9/5/2015, pp. 2–7. 361. CSTC-A, response to SIGAR data call, 2/28/2017. 390. Brussels Conference on Afghanistan, “Self-Reliance through 362. CSTC-A, response to SIGAR data call, 2/28/2017. Mutual Accountability Framework: SMART Deliverables 363. CSTC-A, response to SIGAR data call, 2/28/2017. 2017/2018,” 10/5/2016, pp. 1–3. 364. CSTC-A, response to SIGAR vetting, 4/11/2017. 391. Ministry of Finance, Status Report: Self-Reliance through 365. CSTC-A, response to SIGAR data call, 2/28/2017. Mutual Accountability Framework (SMAF), 1/2017, pp. 1–2. 366. CSTC-A, response to SIGAR data call, 2/28/2017. 392. Afghanistan Analysts Network, “The ‘government of national 367. CSTC-A, response to SIGAR data call, 2/28/2017. unity’ deal (full text),” 9/21/2014. 368. State, PM/WRA, response to SIGAR data call, 3/28/2017. 393. Brussels Conference on Afghanistan, “Self-Reliance through 369. State, PM/WRA, response to SIGAR data call, 3/28/2017. Mutual Accountability Framework: SMART Deliverables 370. Mine Action Programme of Afghanistan, MAPA Fast Facts, 2017/2018,” 10/5/2016, p. 1. 1/23/2017, p. 1. 394. USAID, ODG, “Selected Highlights of Donor Elections Steering 371. State, PM/WRA, response to SIGAR data call, 3/28/2017. Committee Meeting,” 2/4/2017; USAID, ODG, “Elections,” 372. USAID, response to SIGAR data call, 12/28/2015. 2/28/2017; USAID, ODG, “Elections,” 3/13/2017; USAID, ODG, 373. USAID, response to SIGAR data call, 6/24/2016; USAID response to SIGAR vetting, 4/11/2017. Afghanistan, Program Contribution Agreement for AID- 395. ToloNews, “Efforts Ongoing To Finalize Election Budget,” 306-IO-15-00002, 4/20/2015, p. 1; USAID, Quarterly Pipeline 4/8/2017. Analysis Report as of 3/31/2017, 4/9/2017. 396. UN, report of the Secretary-General, The situation in 374. UNMAS, Afghan Civilian Assistance Programme III 2015– Afghanistan and its implications for international peace and 2017, Proposal, 1/19/2015, p. 10. security, 3/3/2017, p. 3. 375. UNMAS, Afghan Civilian Assistance Programme III 2015– 397. ToloNews, “Elections To Be Held At The End Of This Solar 2017, Proposal, 1/19/2015, p. 7. Year,” 4/6/2017. 376. Mine Action Programme of Afghanistan, MAPA Fast Facts, 398. State, SRAP, response to SIGAR data call, 3/24/2017. 1/23/2017, p. 2. 399. USAID, ODG, “Elections,” 3/13/2017. 377. UN, Report of the Secretary-General: The situation in 400. RadioFreeEurope, “Two For All: Afghanistan’s Identity-Card Afghanistan and its implications for international peace and Crisis,” 8/5/2016. security, 12/13/2016, p. 14. 401. ToloNews, “Govt Given 90 Days To Roll Out Electronic ID Card 378. UN, report of the Secretary-General, The situation in System,” 3/29/2017. Afghanistan and its implications for international peace and 402. Pajhwok News, “Ministry Cancels Licenses Of Several Political security, 3/3/2017, p. 12. Parties,” 3/13/2017. 379. ToloNews, “Noor Apologizes for Supporting Abdullah’s 403. Pajhwok News, “Political Parties With Military Wings Be Presidential Bid,” 3/13/2017; Khaama Press, “Ata Suspended: MPs,” 4/9/2017. Mohammad Noor appointed as Balkh governor,” 2/21/2017; 404. Council of the EU, “Brussels Conference on Afghanistan: main RadioFreeEurope, “Afghan Party In Turmoil Over Power- results,” 10/5/2016, p. 1. Sharing Deal,” 1/4/2017. 405. John Kerry, “Remarks at the Brussels Conference on 380. ToloNews, “Noor Announces His Intention To Run For Afghanistan,” 10/5/2016; USAID, OPPD, response to SIGAR President,” 3/21/2017. vetting, 1/12/2017; State, SRAP, response to SIGAR vetting, 381. Khaama Press, “‘Noor has always asked for Balkh, not for him- 1/12/2017. self’: President Ghani,” 3/25/2017. 406. USAID, OPPD, response to SIGAR vetting 10/13/2014; USAID, 382. Reuters, “Powerful Afghan governor pushes for role on national OPPD, response to SIGAR data call, 1/12/2017. stage,” 1/30/2017; ToloNews, “I Was Sexually Assaulted By 407. GIROA, “Communiqué: Conference Outcomes, Contributions Dostum And His Men: Eshchi,” 12/13/2016; BBC, “Afghan Vice- and Participants,” 1/28/2010, p. 5; “The Tokyo Declaration: President Dostum accused of sex assault,” 12/14/2016. Partnership for Self-Reliance in Afghanistan from Transition to 383. AFP, “Afghan VP faces probe over claims of sex assault, Transformation,” 7/8/2012; USAID, OPPD, response to SIGAR torture,” 12/18/2016; The Wall Street Journal, “Afghan Vice vetting, 10/13/2014; The London Conference on Afghanistan, President Dostum Ramps Up Tensions With Kabul,” 2/10/2017. “Afghanistan and International Community: Commitments to 384. New York Times, “Afghanistan Police Surround Vice President’s Reforms and Renewed Partnership: Communiqué,” 12/4/2014; House,” 2/21/2017; New York Times, “After Gunfire, Politicians GIROA, Self-Reliance through Mutual Accountability in Afghanistan Trade Accusations,” 6/17/2013. Framework (SMAF), 9/5/2015, p. 6. 385. Reuters, “Senior Afghan aide says sacking unfair, will further 408. USAID, OPPD, response to SIGAR data call, 3/23/2017. destabilize country,” 4/18/2017; Pajhwok News, “Dostum Opposes Massoud’s Removal: Aide,” 4/18/2017.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 251 ENDNOTES

409. Brussels Conference on Afghanistan, “Self-Reliance through 443. DOD, CSTC-A, response to SIGAR data call, 3/1/2017; DOD, Mutual Accountability Framework: SMART Deliverables OSD-P, response to SIGAR vetting, 4/14/2017. 2017/2018,” 10/5/2016, pp. 2–3. 444. UN, report of the Secretary-General, The situation in 410. USAID, response to SIGAR data call, 4/9/2017. Afghanistan and its implications for international peace and 411. State, “Fact Sheet: Strengthening the Strategic Partnership of security, 3/3/2017, p. 8. the United States and Afghanistan,” 3/24/2015. 445. DOD, CSTC-A, response to SIGAR data call, 3/1/2017; DOD, 412. Pub. L. No. 114-328, p. 865. CSTC-A, response to SIGAR vetting, 4/12/2017; DOD, OSD-P, 413. DOD, OSD-P, response to SIGAR vetting, 4/15/2016. response to SIGAR vetting, 4/14/2017. 414. White House, “Fact Sheet: Wales Summit–NATO’s Changing Role 446. Maj. Gen. Richard Kaiser (Commander, CSTC-A), letter to in Afghanistan,” 9/4/2014; Board of Governors of the Federal Abdullah Habibi (Minister of Defense), 3/5/2017. Reserve, “Foreign Exchange Rates–H.10 Weekly,” 9/8/2014. 447. Maj. Gen. Richard Kaiser (Commander, CSTC-A), letter to 415. White House, “Fact Sheet: NATO’s Enduring Commitment to Abdullah Habibi (Minister of Defense), 3/5/2017. Afghanistan,” 7/9/2016. 448. Maj. Gen. Richard Kaiser (Commander, CSTC-A), letter to 416. DOD, response to SIGAR vetting, 4/3/2017. Mohammed Taj Jahid (Minister of Interior), 3/5/2017. 417. USAID, OPPD, response to SIGAR data call, 12/30/2013. 449. Maj. Gen. Richard Kaiser (Commander, CSTC-A), letter to 418. USAID, OPPD, response to SIGAR data call, 6/30/2014. Mohammed Taj Jahid (Minister of Interior), 3/5/2017. 419. USAID, “Afghanistan Reconstruction Trust Fund (ARTF),” 450. Maj. Gen. Richard Kaiser (Commander, CSTC-A), letter to 8/26/2013. Mohammed Taj Jahid (Minister of Interior), 3/5/2017. 420. USAID, “U.S. government contributed $105 million to Asian 451. USAID, OPPD, response to SIGAR vetting, 4/12/2015. Development Bank Infrastructure Fund for Afghanistan,” 3/18/2014. 452. USAID, OAPA, Request for Categorical Exclusion, 7/14/2016, p. 421. USAID, OPPD, response to SIGAR data call, 12/30/2013. 2; USAID, response to SIGAR data call, 4/9/2017. 422. The World Bank, “Administrator’s Report on Financial Status,” 453. World Bank, ARTF Administrator’s Report on Financial 1/20/2017, p. 4. Status, 2/19/2016, p. 6; World Bank, CBR Afghanistan - 423. The World Bank, “Afghanistan Reconstruction Trust Fund,” Afghanistan Capacity Building for Results Facility (CBR): 9/2016. P123845 - Implementation Status Results Report: Sequence 424. The World Bank, “Afghanistan Reconstruction Trust Fund,” 11, 3/24/2016, p. 2; World Bank, Integrated Safeguards Data 9/2016. Sheet (Restructuring Stage) - Afghanistan Capacity Building 425. BDO, “Briefing Note: Meezan to Qwas FY 1395, September to for Results Facility (CBR) - P123845, 2/19/2016, p. 1. December 2016,” 2/2017; The World Bank, “Implementation 454. Brussels Conference on Afghanistan, “Self-Reliance through Status & Results Report: ARTF - Recurrent and Capital Costs Mutual Accountability Framework: SMART Deliverables (P091258),” 1/22/2017. 2017/2018,” 10/5/2016, p. 1; Ministry of Finance, Progress 426. World Bank, “Draft: The Monitoring of Payroll by the ARTF Report: Self-Reliance through Mutual Accountability Monitoring Agent (with a focus on Education),” 3/31/2016. Framework (SMAF), 9/2016, p. 3; Ministry of Finance, 427. World Bank, “Draft: The Monitoring of Payroll by the ARTF Status Report: Self-Reliance through Mutual Accountability Monitoring Agent (with a focus on Education),” 3/31/2016. Framework (SMAF), 1/2017, p. 2. 428. USAID, OPPD, response to SIGAR vetting, 4/11/2017. 455. State, SRAP, response to SIGAR data call, 3/24/2017. 429. SIGAR, Quarterly Report to the United States Congress, 456. State, SRAP, response to SIGAR data call, 3/24/2017. 1/30/2017, p. 71; DOD, OSD-P, response to SIGAR vetting, 457. UN, report of the Secretary-General, The situation in 4/14/2017. Afghanistan and its implications for international peace and 430. DOD, CSTC-A, response to SIGAR data call, 3/23/2015; DOD, security, 12/13/2016, pp. 2–3; Afghanistan Analysts Network, response to SIGAR vetting, 1/12/2017. “Parliament Kicks Out Ministers Again: A multi-dimensional 431. DOD, CSTC-A, response to SIGAR data call, 7/1/2014. power struggle,” 11/19/2016. 432. DOD, CSTC-A, response to SIGAR data call, 4/4/2014. 458. Reuters, “Afghan leader defies parliament by telling sacked 433. DOD, OSD-P, response to SIGAR vetting, 7/16/2016; DOD, ministers to stay,” 11/14/2016. response to SIGAR vetting, 1/12/2017. 459. State, SRAP, response to SIGAR data call, 3/24/2017; UN, report 434. DOD, CSTC-A, response to SIGAR data call, 3/23/2015. of the Secretary-General, The situation in Afghanistan and its 435. DOD, CSTC-A, response to SIGAR data call, 3/1/2017; DOD, implications for international peace and security, 3/3/2017, p. 2. CENTCOM, response to SIGAR vetting, 4/12/2017. 460. ToloNews, “Govt Under Fire For Failing To Fill Cabinet 436. DOD, CSTC-A, response to SIGAR data call, 3/1/2017; DOD, Positions,” 3/29/2017. CENTCOM, response to SIGAR vetting, 4/12/2017. 461. New York Times, “Afghan Security Ministers Survive 437. DOD, OSD-P, response to SIGAR vetting, 7/16/2016; DOD, Impeachment Vote,” 3/27/2017. response to SIGAR vetting, 1/17/2017. 462. State, SCA, response to SIGAR data call, 3/24/2017. 438. DOD, CSTC-A, response to SIGAR data call, 11/20/2016. 463. Pajhwok News, “4 Wolesi Jirga Members Including Women 439. DOD, response to SIGAR vetting, 1/12/2017. Suspended,” 4/12/2017. 440. DOD, CSTC-A, response to SIGAR data call, 3/1/2017. 464. USAID, “Contract No. AID-OAA-I-12-00003/AID- 441. DOD, CSTC-A, response to SIGAR data call, 3/1/2017. 306-TO-13-00004,” 3/28/2013, p. 9. 442. DOD, CSTC-A, response to SIGAR data call, 3/1/2017. 465. DAI, Assistance to Legislative Bodies of Afghanistan Monthly Report: January 2017, 2/15/2017, p. 7.

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466. Afghan Civic Engagement Program (ACEP): Agreement No. 489. VOA, “Pakistan: US Participation a Must in Russia-initiated AID-306-A-14-00001, 2/3/2016, p. 5. Afghan Talks,” 4/9/2017; Radio Free Europe, “Washington To 467. Checchi and Company Consulting, Inc., Mid-Term Evaluation: Skip Meeting On Afghanistan Hosted By Russia,” 4/17/2017. Afghan Civic Engagement Program, 1/2017, iv. 490. Bloomberg, “Russia Backs Afghan Taliban Demand to Withdraw 468. Checchi and Company Consulting, Inc., Mid-Term Evaluation: Foreign Troops,” 3/31/2017. Afghan Civic Engagement Program, 1/2017, v. 491. State, SRAP, response to SIGAR data call, 3/24/2017; UN, report 469. USAID, ODG, response to SIGAR data call, 3/23/2017. of the Secretary-General, The situation in Afghanistan and its 470. UN, report of the Secretary-General, The situation in implications for international peace and security, 3/3/2017, Afghanistan and its implications for international peace and pp. 4–5. security, 3/3/2017, p. 9. 492. Reuters, “Pakistan says starts fencing Afghanistan border in 471. UN, report of the Secretary-General, The situation in ‘high-threat zones,’” 3/27/2017. Afghanistan and its implications for international peace and 493. AP, “Pakistan to build fence along disputed Afghan border,” security, 3/3/2017, p. 27. 3/26/2017. 472. SIGAR, Quarterly Report to the United States Congress, 494. State, SRAP, response to SIGAR data call, 9/27/2016. 1/30/2014, pp. 128–129. 495. Afghanistan Analyst Network, “Peace With Hekmatyar: What 473. Tetra Tech ARD, Initiative to Strengthen Local Administrations does it mean for battlefield and politics?” 9/29/2016. in Afghanistan (ISLA) Project) Monthly Report, February 496. State, SRAP, response to SIGAR data call, 3/24/2017. 2015, 3/15/2015, ii; USAID, ODG, response to SIGAR data call, 497. UN, report of the Secretary-General, The situation in 12/22/2016; USAID, ODG, response to SIGAR vetting, 1/12/2017. Afghanistan and its implications for international peace and 474. Tetra Tech ARD, “USAID Initiative to Strengthen Local security, 3/3/2017, p. 3. Administrations (ISLA): Weekly Report,” 2/28/2017, p. 2. 498. UN, report of the Secretary-General, The situation in 475. USAID, ODG, response to SIGAR vetting, 4/11/2017. Afghanistan and its implications for international peace and 476. Development Alternatives Inc., Strong Hubs for Afghan Hope security, 3/3/2017, p. 3. and Resilience (SHAHAR): Monthly Report February 2015, 499. USIP, “A Conversation with H.E. Mohammad Ashraf Ghani,” 3/15/2015, p. 4; Central Statistics Office, “Settled Population 3/25/2015. by civil division , Urban and Rural and sex 2004-5,” no date, 500. Wall Street Journal, “EU Aid to Support Afghan Peace Deal accessed 10/5/2016; Central Statistics Office, “Estimated Settled With Warlord,” 4/2/2017. Population by Civil Division , Urban, Rural and Sex-2016-17,” no 501. State, SRAP, response to SIGAR data call, 6/24/2016. date, accessed 10/5/2016; USAID, ODG, response to SIGAR vet- 502. State, POLMIL, response to SIGAR vetting, 1/14/2014. ting, 1/12/2017. 503. State, SCA, response to SIGAR data call, 12/18/2015. 477. USAID, ODG, response to SIGAR data call, 3/23/2017. 504. State, SRAP, response to SIGAR data call, 9/27/2016. 478. USAID, ODG, response to SIGAR data call, 3/23/2017. 505. State, SRAP, response to SIGAR data call, 3/24/2017. 479. DOD, Enhancing Security and Stability in Afghanistan, 506. State, SCA, response to SIGAR data call, 12/22/2016; State, 12/2016, p. 7. SRAP, response to SIGAR data call, 3/24/2017. 480. UN, report of the Secretary-General, The situation in 507. Embassy of the United Kingdom, Embassy of the United States, Afghanistan and its implications for international peace and United Nations Assistance Mission in Afghanistan, and Embassy security, 3/3/2017, pp. 1–2. of the Republic of South Korea, “Consolidated Inputs by Key 481. VOA, “Taliban Denies Talks With Pakistan on Afghan Peace Donors and UNAMA on Shaping an Afghan National Peace and Prospects,” 3/24/2017. Reconciliation Strategy,” 2/7/2017. 482. DOD, “Department of Defense Press Briefing by General 508. ToloNews, “Ghani: ‘There is No Sovereignty of the Law in the Nicholson in the Pentagon Briefing Room,” 12/2/2016. Country,’” 3/15/2017. 483. CQ Congressional Transcripts, “Senate Armed Services 509. U.S. Embassy Kabul, “Statement by Ambassador Hugo Llorens Committee Holds Hearing on the U.S. European Command,” on Corruption,” 4/12/2017. 3/23/2017; CQ Congressional Transcripts, “House Armed 510. Communications with SIGAR employees involved in CTFC Services Committee Holds Hearing on Middle East Security development; DOD, response to SIGAR data call, 3/1/2017; Challenges,” 3/29/2017. SIGAR, Corruption in Conflict: Lessons from the U.S. 484. Al Jazeera, “Russia denies supplying Taliban after Scaparrotti Experience in Afghanistan, 9/2016, ii. claim,” 3/24/2017. 511. USAID, ODG, response to SIGAR data call, 6/25/2015; USAID, 485. DOD, “Joint Press Conference with Secretary Mattis and ODG, response to SIGAR vetting, 7/12/2015. Secretary Fallon in London, England,” 3/31/2017. 512. USAID, ODG, response to SIGAR vetting, 4/13/2016. 486. Reuters, “Russia, Pakistan, China warn of increased Islamic 513. Democracy International, Political Economy Analysis of State threat in Afghanistan,” 12/27/2016; Deutsche Welle, “An Afghanistan’s Service Delivery Capacity, 5/2016, pp. 32–33. Afghanistan conference without Afghanistan,” 12/27/2016. 514. Democracy International, Quarterly Report: Advancing 487. UN, report of the Secretary-General, The situation in Effective Reforms for Civic Accountability, 10/2016, p. 14; Afghanistan and its implications for international peace and USAID, ODG, response to SIGAR vetting, 1/12/2017. security, 3/3/2017, p. 5. 515. Democracy International, A Rapid Assessment of Nangarhar 488. VOA, “Moscow Tells Kabul Ties With Taliban Only to Promote Population Registration Department (PRD), 2/2017, pp. 1–2. Afghan Peace,” 3/17/2017.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 253 ENDNOTES

516. Democracy International, A Rapid Assessment of Nangarhar 543. RadioFreeEurope, “Official: Afghan Defense Ministry Fires Population Registration Department (PRD), 2/2017, p. 2. 1,400 Staff Over Corruption,” 3/28/2017; The Washington Post, 517. Democracy International, Monthly Report: Advancing “Afghan generals face charges in crackdown on military corrup- Effective Reforms for Civic Accountability, 11/2016, pp. 9–10; tion,” 3/29/2017; New York Times, “Afghan General Tasked With Democracy International, Monthly Report: Advancing Effective Cutting Corruption Is Now Accused of It,” 3/28/2017. Reforms for Civic Accountability, 2/2017, pp. 9–10. 544. ToloNews, “239 Graft Cases Tackled By Interior Ministry Last 518. Democracy International, Monthly Report: Advancing Effective Solar Year,” 4/5/2017. Reforms for Civic Accountability, 2/2017, pp. 11–12. 545. DOD, CSTC-A response to SIGAR data call, 11/20/2016. 519. State, INL, response to SIGAR vetting, 4/13/2017. 546. DOD, CSTC-A response to SIGAR data call, 3/1/2017; DOD, 520. USAID, Contract AID-OAA-I-13-0034/AID-306-TO-16-00007, CENTCOM, response to SIGAR vetting, 4/12/2017. 4/16/2016, p. 8; USAID, Contract AID-OAA-I-13-0034/AID- 547. DOD, CSTC-A, response to SIGAR data call, 3/1/2017. 306-TO-16-00007: Modification 01, 7/31/2016, p. 3. 548. DOD, CSTC-A response to SIGAR data call, 2/28/2017. 521. State, INL, response to SIGAR data call, 3/24/2017. 549. DOD, CSTC-A response to SIGAR data call, 2/28/2017. 522. State, INL, response to SIGAR data call, 3/24/2017. 550. DOD, CSTC-A, response to SIGAR data call, 2/28/2017; DOD, 523. VOA, “Afghan Prisoners Sew Lips to Protest Government CENTCOM, response to SIGAR vetting, 4/12/2017. Policy,” 4/5/2017. 551. DOD, CSTC-A, response to SIGAR data call, 2/28/2017. 524. State, INL, response to SIGAR data call, 3/24/2017. 552. DOD, CSTC-A response to SIGAR data call, 2/28/2017. 525. Brussels Conference on Afghanistan, “Self-Reliance through 553. State, Afghanistan 2016 Human Rights Report, 3/3/2017, p. 1. Mutual Accountability Framework: SMART Deliverables 554. State, Afghanistan 2016 Human Rights Report, 3/3/2017, p. 1. 2017/2018,” 10/5/2016, p. 1. 555. State, Afghanistan 2016 Human Rights Report, 3/3/2017, p. 1. 526. UN, report of the Secretary-General, The situation in 556. State, PRM, response to SIGAR data call, 3/24/2017; UN, report Afghanistan and its implications for international peace and of the Secretary-General, The situation in Afghanistan and its security, 6/10/2016, p. 11. implications for international peace and security, 3/3/2017, 527. CSTC-A, “Briefing for Mr. John Sopko,” 6/10/2016. p. 9. 528. UN, report of the Secretary-General, The situation in 557. State, PRM, response to SIGAR data call, 3/24/2017. Afghanistan and its implications for international peace and 558. State, PRM, response to SIGAR data call, 3/24/2017. security, 9/7/2016, p. 10. 559. UN, report of the Secretary-General, The situation in 529. UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and Afghanistan and its implications for international peace and security, 3/3/2017, p. 9. security, 3/3/2017, p. 8. 560. UN, OCHA, “Afghanistan Weekly Field Report,” 3/25/2017. 530. State, INL, response to SIGAR vetting, 4/13/2017. 561. UN, OCHA, “Afghanistan Weekly Field Report,” 3/25/2017; UN, 531. Pajhwok News, “Herat PC Head Sentenced To 30 Months In report of the Secretary-General, The situation in Afghanistan Jail,” 3/28/2017; ToloNews, “Herat Provincial Council Head and its implications for international peace and security, Sentenced To Prison,” 3/27/2017; ToloNews, “Herat Provincial 3/3/2017, p. 9. Council Confirms Scores of Ghost Schools, Teachers,” 562. EUROSTAT, “First time asylum applicants in the EU-28 by citi- 2/23/2016; Pajhwok News, “Heratis Rally Against Corruption, zenship, Q4 2015 – Q4 2016,” 3/16/2017. Warn The Corrupt,” 2/5/2017. 563. Reuters, “Afghan asylum seekers sent home fear deportations 532. Communications with SIGAR employees in Afghanistan. will add to chaos,” 12/16/2016. 533. CSTC-A, response to SIGAR data call, 8/31/2016; CSTC-A, 564. USAID, “Remarks by Administrator Rajiv Shah at the U.S. response to SIGAR data call, 2/28/2017. Institute of Peace Regarding Afghanistan Promote,” 7/18/2013. 534. CSTC-A, response to SIGAR data call, 2/28/2017. 565. USAID, “USAID Launches Long-Term Commitment to Afghan 535. USAID, ODG, response to SIGAR data call, 6/25/2015. Women and Girls,” 11/8/2014; USAID, OPPD, response to SIGAR 536. Independent Joint Anti-Corruption Monitoring and Evaluation vetting, 10/12/2015; USAID, OG, response to SIGAR vetting, Committee, “NEWS RELEASE: MEC Releases its 2nd follow up 10/11/2016. report on the implementation of recommendations in the MEC 566. USAID, OG, response to SIGAR data call, 3/23/2017. report ‘Vulnerability to Corruption in the Afghan Ministry of 567. USAID, OG, response to SIGAR data call, 3/23/2017. Public Health’,” 2/2/2017. 568. USAID, OG, response to SIGAR data call, 3/23/2017. 537. Independent Joint Anti-Corruption Monitoring and Evaluation 569. USAID, OG, response to SIGAR data call, 3/23/2017. Committee, “Press Release,” 2/2/2017. 570. Chemonics International Inc., USAID Promote: Women in 538. USAID, ODG, response to SIGAR data call, 6/25/2015; State, Government Monthly Progress Report, 2/15/2017, p. 6. response to SIGAR vetting, 1/14/2016. 571. GIROA, Self-Reliance through Mutual Accountability 539. DOD, OSD-P, response to SIGAR vetting, 7/16/2016. Framework (SMAF), 9/5/2015, p. 9. 540. Resolute Support, EF2, “CAC Coordination Meeting,” 1/11/2017. 572. Ministry of Finance, Progress Report: Self-Reliance through 541. DAI, Assistance to Legislative Bodies of Afghanistan Monthly Mutual Accountability Framework (SMAF), 9/2016, p. 4. Report: January 2017, 2/15/2017, p. 5; AREU, Separation of 573. Brussels Conference on Afghanistan, “Self-Reliance through Powers under the Afghan Constitution: A Case Study, 3/2015, Mutual Accountability Framework: SMART Deliverables pp. 27–28. 2017/2018,” 10/5/2016, p. 1. 542. USAID, ODG, response to SIGAR vetting, 4/11/2017.

254 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ENDNOTES

574. Central Statistics Office,Afghanistan Statistical Yearbook 597. IMF, “IMF Executive Board Approves A US $44.9 Million 2015-2016, no date, p. 17. Extended Credit Facility Arrangement to Support the Islamic 575. Brussels Conference on Afghanistan, “Self-Reliance through Republic of Afghanistan,” Press Release No. 16/348, 7/20/2016. Mutual Accountability Framework: SMART Deliverables 598. World Bank, Afghanistan Development Update, 10/2016, p. 4; 2017/2018,” 10/5/2016, p. 1. World Bank, “Navigating Risk and Uncertainty in Afghanistan,” 576. Brussels Conference on Afghanistan, “Self-Reliance through Brussels Conference on Afghanistan, October 4–5, 2016, Mutual Accountability Framework: SMART Deliverables 9/28/2016, p. 6; World Bank, Afghanistan Development Update, 2017/2018,” 10/5/2016, p. 1. 4/2016, i. 577. Ministry of Finance, List of New Commitments in the Brussels 599. GIROA, “Jobs for Peace, A proposal for an Economic Conference 2017-2018, 2/21/2017, p. 5. Smoothing Program for Afghanistan, Draft 2,” 11/2015. 578. State, INL, response to SIGAR vetting, 4/13/2017. 600. World Bank, Afghanistan Economic Update, 4/2015, p. 5; 579. Brussels Conference on Afghanistan, “Self-Reliance through GIROA, Afghanistan National Peace and Development Mutual Accountability Framework: SMART Deliverables Framework 2017 to 2021, 8/30/2016, pp. 10, 16. 2017/2018,” 10/5/2016, p. 1. 601. World Bank, South Asia Economic Focus, Fall 2016: 580. Ministry of Finance, List of New Commitments in the Brussels Investment Reality Check, 10/3/2016, p. 46; IMF, Staff Report Conference 2017-2018, 2/21/2017, p. 5. for the 2015 Article IV Consultation and the First Review 581. The exchange rate on the date parliament passed the FY 1396 Under the Staff-Monitored Program, 11/3/2015, pp. 6, 16; IMF, budget was AFN 66.80 to $1. MOF, “Wolesi Jirga Approves the “Islamic Republic of Afghanistan, Request for a Three-Year 1396 Financial Year National Budget,” 1/16/2017. Arrangement Under the Extended Credit Facility,” 7/1/2016, p. 582. IMF, “IMF Reaches Staff-Level Agreement on First review Under 41; World Bank, Afghanistan Development Update, 10/2016, the ECF with Afghanistan,” 3/6/2017; IMF, “IMF Executive p. 3; Der Spiegel (Germany), “Interview with Afghan President Board Approves A US $44.9 Million Extended Credit Facility Ashraf Ghani,” 12/2/2015. Arrangement to Support the Islamic Republic of Afghanistan,” 602. IMF, “Islamic Republic of Afghanistan, Request for a Three- Press Release No. 16/348, 7/20/2016. Year Arrangement Under the Extended Credit Facility,” 583. FATF, “Improving Global AML/CFT Compliance: On-Going 7/1/2016, p. 42; World Bank, “Navigating Risk and Uncertainty Process,” 2/24/2017; Treasury, response to SIGAR data call, in Afghanistan,” Brussels Conference on Afghanistan, October 3/24/2017. 4–5, 2016, 9/28/2016, p. 6. 584. DAB, Financial Intelligence Unit, Annual Report 2016, 1/4/2017, 603. World Bank, “Navigating Risk and Uncertainty in Afghanistan,” p. 22. Brussels Conference on Afghanistan, October 4–5, 2016, 585. Treasury, response to SIGAR vetting, 7/11/2014. 9/28/2016, pp. 3, 10–11. 586. State, International Narcotics Control Strategy Report, Vol. II, 604. DOD, Enhancing Security and Stability in Afghanistan, 12/2016, 3/2017, pp. 8, 27. p. 32. 587. Tolo News, “Ghani Introduces Nehan as Mines and Petroleum 605. The exchange rate on the date parliament passed the FY 1396 Minister,” 3/27/2017. budget was AFN 66.80 to $1. Numbers rounded. MOF, National 588. Tolo News, “Nargis Nehan Takes Over as Acting Minister of Budget Document, 1396 Fiscal Year, 1/16/2017, pp. 6, 72. Mines,” 4/1/2017. 606. World Bank, “Navigating Risk and Uncertainty in Afghanistan,” 589. Integrity Watch Afghanistan, “New Mining Minister Will Face Brussels Conference on Afghanistan, October 4–5, 2016, Test of Government Credibility on Reforms and Revenue: Civil 9/28/2016, p. 11. Society Letter to President Ghani,” 3/28/2017. 607. Currency depreciation rates are end-on-year December 2015 590. Tolo News, “Minister of Mines Resigns,” 3/28/2016. compared to December 2014. World Bank, Afghanistan 591. See Appendix B. Development Update, 4/2016, i, p. 8. 592. State, Congressional Budget Justification, Department of 608. MOF, Treasury, Documents, accessed 4/14/2017, http://www. State, Foreign Operations, and Related Programs, Fiscal Year treasury.gov.af/en/documents. 2017, 2/5/2016, pp. 137, 156. 609. MOF, Directorate Budget General, 1395 Monthly Fiscal 593. State, Congressional Budget Justification, Department of Bulletin Month 12, 11/3/2016; World Bank, ARTF, Mid-Year State, Foreign Operations, and Related Programs, Fiscal Year Report, December 21, 2015 to June 20, 2016, 3/8/2017, p. 2. 2017, 2/5/2016, pp. 137, 156. 610. DOD, CSTC-A, response to SIGAR data call, 3/1/2017; DOD, 594. World Bank, “Navigating Risk and Uncertainty in Afghanistan,” CSTC-A, response to SIGAR vetting, 4/12/2017. Brussels Conference on Afghanistan, October 4–5, 2016, 611. USAID, email correspondence to SIGAR, 3/29/2017; USAID, 9/28/2016, pp. 2, 5–6; World Bank, Afghanistan Development OFM, response to SIGAR vetting, 4/11/2017. Update, 10/2016, p. 13. 612. The exchange rate on the date parliament passed the FY 1396 595. IMF, “Islamic Republic of Afghanistan, Request for a Three-Year budget was AFN 66.80 to $1. Numbers rounded. MOF, “Wolesi Arrangement Under the Extended Credit Facility,” 7/1/2016, pp. Jirga Approves the 1396 Financial Year National Budget,” 4, 7. 1/16/2017; MOF, National Budget Document, 1396 Fiscal Year, 596. World Bank, “Navigating Risk and Uncertainty in Afghanistan,” 1/16/2017, pp. 11–12, 29. Brussels Conference on Afghanistan, October 4–5, 2016, 613. MOF, National Budget Document, 1396 Fiscal Year, 1/16/2017, 9/28/2016, p. 2. pp. 3, 6, 9–10, 29; World Bank, Afghanistan Development Update, 10/2016, pp. i, 37.

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614. IMF, “IMF Reaches Staff-Level Agreement on First Review 634. State, International Narcotics Control Strategy Report, Vol. II, Under the ECF with Afghanistan,” 3/6/2017; IMF, “IMF 3/2017, p. 28. Executive Board Approves A US $44.9 Million Extended Credit 635. Treasury, response to SIGAR data call, 3/24/2017; Treasury, Facility Arrangement to Support the Islamic Republic of response to SIGAR vetting, 4/13/2017; State, INL, response to Afghanistan,” Press Release No. 16/348, 7/20/2016. SIGAR vetting, 4/13/2017. 615. UN, Report of the Secretary General, The Situation in 636. Treasury, response to SIGAR data call, 3/24/2017; State, INL, Afghanistan and its Implications for International Peace and response to SIGAR vetting, 4/13/2017. Security, 3/3/2017, p. 5. 637. DAB, Financial Intelligence Unit, Annual Report 2016, 1/4/2017, 616. IMF, “Islamic Republic of Afghanistan, Request for a Three-Year pp. 4, 10, 16, 18. Arrangement Under the Extended Credit Facility,” 7/1/2016, 638. 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656. State, SRAP, response to SIGAR data call, 3/24/2017; DOJ, 678. MOF, National Budget Document, 1394 Fiscal Year, 1/28/2015, response to SIGAR data call, 3/23/2017. p. 8; SIGAR analysis of MOF, Qaws Financial Statements 657. Independent Joint Anti-Corruption Monitoring and Evaluation FY1394, 2/27/2016. Committee, Update on Kabul Bank; What Has Been Achieved 679. SIGAR, analysis of MOF, Aqrab Financial Statements So Far? 10/2/2016, pp. 1–2; SIGAR analysis of Kabul Bank FY1395, 12/4/2016; SIGAR, analysis of MOF, Aqrab Financial Receivership, “Kabul Bank’s Assets Recovery Brief Report,” Statements FY1394, 12/3/2015; MOF, National Budget 3/19/2017. Document, 1395 Fiscal Year, 1/18/2016, p. 79. 658. State, SCA, response to SIGAR data call, 12/22/2016; Kabul Bank 680. MOF, National Budget Document, 1396 Fiscal Year, 1/16/2017, Receivership, “Kabul Bank’s Assets Recovery Brief Report,” p. 77. 3/19/2017; Kabul Bank Receivership, “Agreement Schedule,” 681. 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USAID, OAG, “Update on ACE-II Innovation Grant Fund Activities,” 3/20/2017; USAID, OAG, Agricultural Credit Enhancement II Program, Monthly Report No. 20, 2/2017, p. 7.

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702. USAID, OAG, “Update on ACE-II Innovation Grant Fund Fiscal Year 2014, 5/8/2015; DOD, response to SIGAR data call, Activities,” 3/20/2017. 9/28/2015 and 12/22/2016. 703. MFA, Towards Regional Economic Growth and Stability: The 727. USAID, OI, response to SIGAR data call, 12/22/2016. Silk Road Through Afghanistan, 9/2015, p. 37. 728. USAID, OI, response to SIGAR data call, 3/24/2017; 704. World Bank, Afghanistan Country Snapshot, 10/2016, p. 7. Fluentgrid, “DABS Commercialization Part-2 for Generation & 705. DABS, “Da Afghanistan Breshna Sherkat, Presentation,” Transmission, Progress Update,” 1/2017. 9/17/2016; USAID, OI, response to SIGAR vetting, 4/11/2017. 729. USAID, OI, response to SIGAR data call, 3/24/2017 and 706. 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749. In the Doing Business 2016, Afghanistan ranked 177 of 189 766. UNAMA, “WJ Proceedings Summary,” 5/272015, p. 4; SIGAR countries measured. World Bank, Doing Business 2017: Equal 17-32-SP, Schools in Balkh Province: Observations from Site Opportunity for All, 10/25/2016, p. 7; World Bank, Doing Visits at 26 Schools, 11/2016. p. 5. Business 2016: Measuring Regulatory Quality and Efficiency, 767. Afghanistan Analysts Network, A Success Story Marred by 10/12/2015, p. 5. Ghost Numbers: Afghanistan’s Inconsistent Education 750. World Bank, Doing Business 2017: Equal Opportunity for All, Statistics, 3/13/2017, p. 6. 10/25/2016, pp. 14, 170, 188; World Bank, Doing Business 2016: 768. Tolo News, “Task Team Uncovers Hundreds of Ghost Schools,” Measuring Regulatory Quality and Efficiency, 10/12/2015, p. 1/2/2016. 183; Afghanistan Analysts Network, Afghanistan’s Government 769. 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REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 259 ENDNOTES

Services, Semi-Annual Report, October 2014–March 2015, 807. State, INL, “Eradication and Interdiction,” https://www.state. 7/12/2015, p. 7. gov/j/inl/focus/counternarcotics/eradication/, accessed 4/4/2017. 783. USAID, response to SIGAR vetting, 7/12/2015. 808. State, INL, “Eradication and Interdiction,” https://www.state. 784. SIGAR analysis of USAID response to SIGAR data call, 4/9/2017; gov/j/inl/focus/counternarcotics/eradication/, accessed 4/4/2017. SIGAR, analysis of World Bank, ARTF, Administrator’s Report 809. DOD, response to SIGAR data call, 3/22/2017. on Financial Status, As of February 19, 2017. 810. DOD, response to SIGAR data call, 3/22/2017. 785. USAID, OHN, Health Sector Resiliency Project, Quarterly 811. DOD, response to SIGAR data call, 3/22/2017. Report, October 1–December 31, 2016, 1/31/2017, p. 3; USAID, 812. DOD, response to SIGAR data call, 3/22/2017. response to SIGAR data call, 4/9/2017; USAID, OHN, response 813. USFOR-A, response to SIGAR data call, 3/3/2017; INL response to SIGAR vetting, 1/14/2016. to SIGAR vetting, 3/13/2017. 786. USAID, OHN, Health Sector Resiliency Project, Quarterly 814. UNODC, Afghanistan Opium Survey 2016: Cultivation and Report, October 1–December 31, 2016, 1/31/2017, pp. 7–8, 10. Production, 12/2016, p. 6. 787. Global Polio Eradication Initiative, “Data and Monitoring, Polio 815. State, INL, International Narcotics Control Strategy Report, This Week,” 4/5/2017. Volume I, 3/2017, p. 91. 788. Global Polio Eradication Initiative, “Where We Work, Endemic 816. State, INL, International Narcotics Control Strategy Report, Countries,” accessed 4/4/2017, http://polioeradication.org/ Volume I, 3/2017, p. 91. where-we-work/; The Guardian, “Pakistan and Afghanistan 817. State, INL, International Narcotics Control Strategy Report, Join Forces to Wipe Out Polio,” 4/5/2016. Volume I, 3/2017, p. 91. 789. USAID, OHN, response to SIGAR vetting, 4/11/2017. 818. State, INL, response to SIGAR data call, 3/24/2017. 790. USAID, response to SIGAR vetting, 4/11/2017 and 1/30/2017; 819. State, INL, response to SIGAR data call, 12/20/2016. Guardian, “Pakistan and Afghanistan Join Forces to Wipe 820. State, INL, response to SIGAR data call, 3/10/2017. Out Polio,” 4/5/2016; UN, Report of the Secretary General, 821. State, INL, response to SIGAR data call, 6/25/2015. The Situation in Afghanistan and its Implications for 822. State, INL, response to SIGAR data call, 6/24/2016. International Peace and Security, 3/3/2017, p. 11. 823. State, INL, response to SIGAR data call, 3/24/2017; INL response 791. USAID, OHN, response to SIGAR vetting, 4/11/2017. to SIGAR vetting, 3/13/2017. 792. MOPH, “Chief Executive Officer of the Afghan Unity 824. State, INL, response to SIGAR data call, 3/24/2017. Government Inaugurated the National Polio Eradication 825. State, INL, response to SIGAR data call, 6/24/2016. Emergency Operations Center,” 4/3/2017. 826. State, INL, response to SIGAR data call, 6/24/2016. 793. USAID, OHN, response to SIGAR vetting, 4/11/2017. 827. State, INL, response to SIGAR data call, 3/24/2017. 794. USAID, OHN, response to SIGAR data call, 3/24/2017. 828. State, INL, response to SIGAR data call, 3/24/2017. 795. State, INL, International Narcotics Control Strategy Report, 829. State, INL, response to SIGAR data call, 3/24/2017. Volume II, March 2017, p. 27; State, INL, “Law Enforcement, 830. State, INL, response to SIGAR data call, 3/24/2017. Narcotics, Anti-corruption: Briefing on the International 831. State, INL, response to SIGAR data call, 3/24/2017. Narcotics Control Strategy Report, 3/2/2017. 832. USAID, OAG, response to SIGAR data call, 3/22/2017. 796. DOD, Department of Defense Press Briefing by General 833. State, INL, response to SIGAR data call, 12/20/2016. Nicholson in the Pentagon Briefing Room, 12/2/2016. 834. State, INL, response to SIGAR data call, 3/10/2017. 797. State, INL, International Narcotics Control Strategy Report, 835. State, INL, response to SIGAR vetting, 10/14/2016; UNODC, INL Volume I, March 2017, p. 90. Proposal UNODC Sub-Program 3 – Alternative Development, 798. State, INL, International Narcotics Control Strategy Report, Strengthen and Diversity Licit Livelihoods though Alternative Volume I, March 2017, p. 90. Development Interventions, 2016, pp. 12–14. 799. State, INL, “Law Enforcement, Narcotics, Anti-corruption: 836. State, INL, response to SIGAR data call, 3/24/2017. Briefing on the International Narcotics Control Strategy Report, 837. State, INL, response to SIGAR data call, 3/10/2017. 3/2/2017. 838. State, INL, response to SIGAR vetting, 10/14/2016; UNODC, 800. UNODC, Afghanistan Opium Survey 2016: Cultivation and Afghanistan Opium Survey 2016: Cultivation and Production, Production, 12/2016, p. 6. 12/2016, p. 16. 801. State, INL, International Narcotics Control Strategy Report, 839. State, INL, response to SIGAR vetting, 10/14/2016; UNDP, Volume I, March 2017, p. 90. Community-Based Agriculture and Rural Development 802. UNODC, Afghanistan Synthetic Drugs Situation Assessment, (CBARD) Project, Project Proposal, p. 1. 1/2017, p. 9. 840. State, INL, response to SIGAR data call, 3/24/2017. 803. State, INL, International Narcotics Control Strategy Report, 841. USAID, Kandahar Food Zone Program (KFZ) Monthly Report Volume I, March 2017, p. 90. for February 2017, 2/2017. 804. See Appendix B of this report. 842. USAID, Kandahar Food Zone (KFZ) Program Year 4 KFZ 805. DOD, response to SIGAR vetting, 7/16/2016. Quarterly Progress Report, Q1 FY2017 (October 1–December 806. White House, FY 2016 Budget and Performance Summary, 31, 2016), 2/5/2017, pp. 34–35, 38. Companion to the National Drug Control Strategy, 11/2015, 843. USAID, Kandahar Food Zone (KFZ) Program Year 4 KFZ p. 249; DEA, response to SIGAR data call, 12/15/2016; DEA Quarterly Progress Report, Q1 FY2017 (October 1–December response to SIGAR vetting, 10/15/2016. 31, 2016), 2/5/2017.

260 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ENDNOTES

844. USAID, response to SIGAR data call, 12/22/2016; USAID, 855. USAID, Commercial Horticulture and Agricultural Marketing response to SIGAR vetting, 10/11/2016; USAID, response to Program (CHAMP) January 2017 Monthly Report, 2/27/2017, SIGAR vetting, 3/13/2017. pp. 1, 3. 845. USAID, OAG, response to SIGAR data call, 3/22/2017; USAID, 856. USAID, Commercial Horticulture and Agricultural Marketing Award AID-306-C-16-00011, 7/21/2016, pp. 7, 18; USAID, Program (CHAMP), https://www.usaid.gov/sites/default/files/ response to SIGAR vetting, 10/11/2016. documents/1871/Commercial%20Horticulture%20and%20 846. USAID, Award AID-306-C-16-00011, 7/21/2016, pp. 7, 18; Agricultural%20Marketing%20Project%20%28CHAMP%29.pdf, USAID, response to SIGAR vetting, 10/11/2016. accessed 4/5/2017. 847. USAID, OAG, response to SIGAR data call, 3/22/2017. 857. USAID, Commercial Horticulture and Agricultural Marketing 848. USAID, OAG, response to SIGAR data call, 3/22/2017. Program (CHAMP) January 2017 Monthly Report, 2/27/2017, 849. USAID, Regional Agriculture Development Program-North p. 4. (RADP-N), https://www.usaid.gov/sites/default/files/docu- 858. State, INL, International Narcotics Control Strategy Report, ments/1871/Regional%20Agricultural%20Development%20 Volume I, March 2017, p. 90. Program%20-%20North%20%28RADP-N%29_0.pdf, accessed 859. State, INL, International Narcotics Control Strategy Report, 4/5/2017. Volume I, March 2017, p. 92. 850. USAID, OAG, response to SIGAR data call, 3/22/2017. 860. State, INL, response to SIGAR data call, 12/20/2016. 851. USAID, Regional Agriculture Development Program-South 861. State, INL, response to SIGAR data call, 4/1/2016 and 12/20/2016. (RADP-S), https://www.usaid.gov/sites/default/files/docu- 862. State, INL, response to SIGAR data call, 3/10/2017; INL response ments/1871/Regional%20Agricultural%20Development%20 to SIGAR vetting, 3/13/2017. Program-South%20%28RADP-S%29.pdf, accessed 4/5/2017. 863. State, INL, International Narcotics Control Strategy Report, 852. USAID, OAG, response to SIGAR data call, 3/22/2017. Volume I, March 2017, p. 92. 853. USAID, Regional Agriculture Development Program-West 864. Sayara Strategies, Counter Narcotics Community Engagement (RADP-W), https://www.usaid.gov/sites/default/files/docu- III, Quarterly Report April – June 2016, 2016, pp. 3–4. ments/1871/Regional%20Agricultural%20Development%20 865. Sayara Strategies, Counter Narcotics Community Engagement Program-West%20%28RADP-W%29.pdf, accessed 4/5/2017. – Phase III, Target Audience Analysis, December 2016, 854. USAID, OAG, response to SIGAR data call, 3/22/2017. 12/2016, p. 4. 866. Sayara Strategies, Counter Narcotics Community Engagement – Phase III, Target Audience Analysis, December 2016, 12/2016, p. 5.

REPORT TO THE UNITED STATES CONGRESS I APRIL 30, 2017 261 The National Defense Authorization Act for FY 2008 (Pub. L. No. 110-181) established the Special Inspector General for Afghanistan Reconstruction (SIGAR).

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